Huron Consulting Group Announces First Quarter 2013 Financial Results

  Huron Consulting Group Announces First Quarter 2013 Financial Results

  *Revenues increased 18.3% to $164.0 million for Q1 2013 compared to $138.6
    million in Q1 2012.
  *Operating income for Q1 2013 was $21.3 million compared to $3.6 millionin
    Q1 2012.
  *Adjusted EBITDA^(6), a non-GAAP measure, more than doubled to
    $25.6million in Q1 2013 compared to $11.8 million in Q1 2012.
  *Diluted earnings per share from continuing operations for Q1 2013 was
    $0.51 compared to $0.03 in Q1 2012.
  *Adjusted diluted earnings per share from continuing operations^(6), a
    non-GAAP measure, was $0.51 in Q1 2013 compared to $0.13 in Q1 2012.
  *Company affirms its previous earnings guidance range for full year 2013,
    including revenue expectations in a range of $655.0 million to $685.0
    million.

Business Wire

CHICAGO -- April 25, 2013

Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider of business
consulting services, today announced financial results for the first quarter
ended March 31, 2013.

“Huron’s first quarter results were a solid start to 2013, primarily due to
the continuing challenges within our clients’ markets,” said James H. Roth,
chief executive officer and president, Huron Consulting Group. “Uncertainties
brought about by healthcare reform, reimbursement issues, and the competitive
environment facing most hospitals and academic medical centers provide an
opportune base for us to deliver value to our provider clients. Colleges and
universities are also facing a rapidly changing competitive environment.
Collectively, these factors give us confidence that demand for our services
will continue at a solid pace throughout 2013.”

First Quarter 2013 Results

The following information is reported on a “continuing operations” basis
unless otherwise noted.

Revenues for the first quarter of 2013 were $164.0 million, an increase of
18.3% compared to $138.6 million for the first quarter of 2012. The Company's
first quarter 2013 operating income was $21.3 million, compared to $3.6
million in the first quarter of 2012. Net income from continuing operations
was $11.4million, or $0.51 per diluted share, for the first quarter of 2013
compared to $0.6million, or $0.03 per diluted share, for the same period last
year. Net income was $11.3 million, or $0.50 per diluted share, for the first
quarter of 2013, compared to $0.9 million, or $0.04 per diluted share, for the
same period last year.

First quarter 2013 earnings before interest, taxes, depreciation and
amortization ("EBITDA")^(6) was $26.8 million, or 16.3% of revenues, compared
to $9.4 million, or 6.8% of revenues, in the comparable quarter last year.

In addition to using EBITDA to evaluate the Company’s financial performance,
management uses non-GAAP financial measures, which exclude the effect of the
following items (in thousands):

                                   Three Months Ended
                                    March 31,
                                     2013      2012   
Amortization of intangible assets   $ 1,456      $ 1,619
Restatement related expenses        $ —          $ 1,505
Restructuring charges               $ —          $ 830
Litigation settlement gain          $ (1,150 )   $ —
Tax effect                          $ (122   )   $ (1,582 )

The Company recorded a $1.15 million litigation settlement gain during the
first quarter of 2013. The Company had previously recorded a $1.15 million
charge in the second quarter of 2012 related to settlement discussions in a
lawsuit filed against Huron and others by Associates Against Outlier Fraud.In
March 2013, the court granted Huron’s motion for summary judgment and
dismissed the second amended complaint in its entirety with prejudice. As a
result, the Company reversed the $1.15 million charge taken in 2012. The
plaintiff filed an appeal and the Company filed a cross appeal of an earlier
denial of a motion to dismiss filed by Huron.

Adjusted EBITDA^(6) was $25.6 million, or 15.6% of revenues, in the first
quarter of 2013, compared to $11.8 million, or 8.5% of revenues, in the
comparable quarter last year. Adjusted net income^(6) from continuing
operations was $11.6 million, or $0.51 per diluted share for the first quarter
of 2013 compared to $3.0 million, or $0.13 per diluted share, for the
comparable period in 2012.

The average number of full-time billable consultants^(1) was 1,501 in the
first quarter of 2013 compared to 1,294 in the same quarter last year.
Full-time billable consultant utilization rate^(2) was 77.9% during the first
quarter of 2013 compared with 77.8% during the same period last year. Average
billing rate per hour for full-time billable consultants^(3) was $212 for the
first quarter of 2013 compared to $203 for the first quarter of 2012. The
average number of full-time equivalent professionals^(4) totaled 1,186 in the
first quarter of 2013 compared to 989 for the comparable period in 2012.

Operating Segments

Huron’s results reflect a portfolio of service offerings focused on helping
clients address complex business challenges.

In the first quarter of 2013, the Company reorganized its internal financial
reporting structure. Under the new structure, the Company now reports
information as five operating segments: Huron Healthcare; Huron Legal; Huron
Education and Life Sciences; Huron Financial; and All Other.

The Company’s year-to-date revenues by operating segment are as follows: Huron
Healthcare (48%); Huron Legal (25%); Huron Education and Life Sciences (22%);
and Huron Financial (5%). Financial results by segment are included in the
attached schedules and in Huron's forthcoming Form 10-Q filing for the quarter
ended March 31, 2013.

Outlook for 2013

Based on currently available information, the Company affirmed guidance, which
was previously announced on February 20, 2013, for full year 2013 revenues
before reimbursable expenses in a range of $655.0 million to $685.0 million.
The Company also anticipatesEBITDAin a range of $118.5 million to$127.0
million, Adjusted EBITDAin a range of $120.5 million to $129.0 million, GAAP
diluted earnings per share in a range of $2.25 to $2.45, and non-GAAP adjusted
diluted earnings per share in a range of $2.45 to $2.65.

Management will provide a more detailed discussion of its outlook during the
Company’s earnings conference call webcast.

First Quarter 2013 Webcast

The Company will host a webcast to discuss its financial results today, April
25, 2013, at 5:00 p.m. Eastern Time (4:00 p.m. Central Time). The conference
call is being webcast by ThomsonReuters and can be accessed at Huron
Consulting Group’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.

About Huron Consulting Group

Huron Consulting Group helps clients in diverse industries improve
performance, reduce costs, leverage technology, process and review large
amounts of complex data, address regulatory changes, recover from distress and
stimulate growth. Our professionals employ their expertise in administration,
management, finance and operations to provide our clients with specialized
analyses and customized advice and solutions that are tailored to address each
client's particular challenges and opportunities to deliver sustainable and
measurable results. The Company provides consulting services to a wide variety
of both financially sound and distressed organizations, including healthcare
organizations, leading academic institutions, Fortune 500 companies,
governmental entities and law firms. Huron has worked with more than 95 of the
top 100 research universities, more than 400 corporate general counsel, and
more than 385 hospitals and academic medical centers. Learn more at
www.huronconsultinggroup.com.

Use of Non-GAAP Financial Measures^(6)

In evaluating the Company’s financial performance and outlook, management uses
EBITDA, Adjusted EBITDA, Adjusted EBITDA as a percentage of revenues, adjusted
net income from continuing operations and adjusted diluted earnings per share
from continuing operations, which are non-GAAP measures. Management believes
that such measures, as supplements to operating income, net income from
continuing operations and diluted earnings per share from continuing
operations and other GAAP measures, are useful indicators for investors. These
useful indicators can help readers gain a meaningful understanding of our core
operating results and future prospects. 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.

Statements in this press release, including the information incorporated by
reference herein, 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 (the “Exchange Act”) 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,” “meets,” “could,” “intends,” “might,”
“predicts,” “seeks,” “would,” “believes,” “estimates,” “plans” or “continues.”
These forward-looking statements reflect our current expectation about our
future requirements and needs, results, levels of activity, performance, or
achievements, including, without limitation, current expectations with respect
to, among other factors, utilization rates, billing rates, and the number of
revenue-generating professionals; that we are able to expand our service
offerings; that we successfully integrate the businesses we acquire; and that
existing market conditions continue to trend upward. These statements involve
known and unknown risks, uncertainties and other factors, including, among
others, those described under “Item 1A. Risk Factors” in our Annual Report on
Form 10-K for the year ended December 31, 2012 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. We disclaim 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 EARNINGS
(In thousands, except per share amounts)
(Unaudited)
                                                                
                                                     Three Months Ended
                                                     March 31,
                                                     2013          2012
Revenues and reimbursable expenses:
Revenues                                             $ 164,036     $ 138,637
Reimbursable expenses                                 15,336      13,796  
Total revenues and reimbursable expenses               179,372       152,433
Direct costs and reimbursable expenses (exclusive
of depreciation
and amortization shown in operating expenses):
Direct costs                                           106,128       96,781
Amortization of intangible assets and software         658           1,142
development costs
Reimbursable expenses                                 15,351      13,818  
Total direct costs and reimbursable expenses          122,137     111,741 
Operating expenses:
Selling, general and administrative                    32,263        30,067
Restructuring charges                                  -             830
Restatement related expenses                           -             1,505
Litigation settlement gain                             (1,150  )     -
Depreciation and amortization                         4,779       4,653   
Total operating expenses                              35,892      37,055  
Operating income                                       21,343        3,637
Other income (expense), net:
Interest expense, net of interest income               (1,863  )     (1,866  )
Other income, net                                     13          333     
Total other expense, net                              (1,850  )    (1,533  )
Income from continuing operations before income        19,493        2,104
tax expense
Income tax expense                                    8,124       1,517   
Net income from continuing operations                  11,369        587
(Loss) income from discontinued operations, net of    (32     )    269     
tax
Net income                                           $ 11,337     $ 856     
                                                                   
Net earnings per basic share:
Net income from continuing operations                $ 0.51        $ 0.03
Income from discontinued operations, net of tax      $ -          $ 0.01    
Net income                                           $ 0.51       $ 0.04    
                                                                   
Net earnings per diluted share:
Net income from continuing operations                $ 0.51        $ 0.03
Income from discontinued operations, net of tax      $ (0.01   )   $ 0.01    
Net income                                           $ 0.50       $ 0.04    
                                                                   
Weighted average shares used in calculating
earnings per share:
Basic                                                  22,139        21,775
Diluted                                                22,487        22,164

HURON CONSULTING GROUP INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
                                                               
                                                  March 31,    December 31,
                                                    2013          2012
Assets
Current assets:
Cash and cash equivalents                           $ 5,749       $  25,162
Receivables from clients, net                         101,549        97,510
Unbilled services, net                                59,123         47,232
Income tax receivable                                 1,003          192
Deferred income taxes, net                            9,631          14,751
Prepaid expenses and other current assets            13,914       15,525  
Total current assets                                  190,969        200,372
Property and equipment, net                           33,269         33,805
Other non-current assets                              15,584         15,322
Intangible assets, net                                17,337         18,879
Goodwill                                             518,916      519,522 
Total assets                                        $ 776,075    $  787,900 
                                                                  
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable                                    $ 6,978       $  8,461
Accrued expenses                                      15,786         17,692
Accrued payroll and related benefits                  32,869         61,672
Bank borrowings, current portion                      25,000         -
Accrued consideration for business acquisitions,      5,586          5,640
current portion
Income tax payable                                    165            7,872
Deferred revenues                                    15,345       15,388  
Total current liabilities                             101,729        116,725
Non-current liabilities:
Deferred compensation and other liabilities           7,140          6,973
Bank borrowings, net of current portion               177,500        192,500
Deferred lease incentives                             6,874          6,936
Deferred income taxes                                 15,784         14,560
Accrued consideration for business acquisitions,     4,956        4,885   
net of current portion
Total non-current liabilities                         212,254        225,854
                                                                  
Commitments and Contingencies
                                                                  
Stockholders’ equity
Common stock; $0.01 par value; 500,000,000 shares
authorized;
25,184,665 and 24,793,327 shares issued at March
31, 2013
and December 31, 2012, respectively                   243            240
Treasury stock, at cost, 1,893,745 and 1,880,809
shares at
March 31, 2013 and December 31, 2012,                 (84,137 )      (83,715 )
respectively
Additional paid-in capital                            427,607        420,825
Retained earnings                                     120,667        109,330
Accumulated other comprehensive loss                 (2,288  )     (1,359  )
Total stockholders’ equity                           462,092      445,321 
Total liabilities and stockholders’ equity          $ 776,075    $  787,900 

HURON CONSULTING GROUP INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                                                                
                                                     Three Months Ended
                                                     March 31,
                                                     2013          2012
Cash flows from operating activities:
Net income                                           $ 11,337      $ 856
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization                          5,437         6,621
Share-based compensation                               4,635         4,842
Allowances for doubtful accounts and unbilled          6,953         2,246
services
Deferred income taxes                                  6,083         3,344
Changes in operating assets and liabilities, net
of businesses acquired:
(Increase) decrease in receivables from clients        (4,742  )     2,133
(Increase) decrease in unbilled services               (18,423 )     4,456
(Increase) decrease in current income tax              (8,513  )     2,379
receivable / payable, net
(Increase) decrease in other assets                    2,459         1,853
Increase (decrease) in accounts payable and            (3,000  )     3,492
accrued liabilities
Increase (decrease) in accrued payroll and related     (27,018 )     (36,795 )
benefits
Increase (decrease) in deferred revenues              (34     )    (7,978  )
Net cash used in operating activities                 (24,826 )    (12,551 )
                                                                   
Cash flows from investing activities:
Purchases of property and equipment, net               (3,576  )     (5,267  )
Net investment in life insurance policies              (507    )     (361    )
Purchases of businesses, net of cash acquired          -             (31,298 )
Capitalization of internally developed software       (692    )    -       
Net cash used in investing activities                 (4,775  )    (36,926 )
                                                                   
Cash flows from financing activities:
Proceeds from exercise of stock options                27            29
Shares redeemed for employee tax withholdings          (565    )     (3,710  )
Tax benefit from share-based compensation              803           1,116
Proceeds from borrowings under credit facility         22,000        93,000
Repayments on credit facility                          (12,000 )     (42,500 )
Payments of capital lease obligations                 -           (5      )
Net cash provided by financing activities             10,265      47,930  
                                                                   
Effect of exchange rate changes on cash                (77     )     430
                                                                   
Net decrease in cash and cash equivalents              (19,413 )     (1,117  )
Cash and cash equivalents at beginning of the         25,162      5,080   
period
Cash and cash equivalents at end of the period       $ 5,749      $ 3,963   

HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA
(Unaudited)
                                                                 
                                        Three Months Ended          Percent
                                        March 31,                   Increase
Segment and Consolidated Operating     2013         2012         (Decrease)
Results (in thousands):
Huron Healthcare:                                   
Revenues                                $ 78,745      $ 63,465      24.1   %
Operating income                        $ 31,161      $ 15,838      96.7   %
Segment operating income as a percent     39.6    %     25.0    %
of segment revenues
Huron Legal:
Revenues                                $ 40,944      $ 41,383      (1.1   %)
Operating income                        $ 2,938       $ 9,511       (69.1  %)
Segment operating income as a percent     7.2     %     23.0    %
of segment revenues
Huron Education and Life Sciences:
Revenues                                $ 35,726      $ 27,676      29.1   %
Operating income                        $ 9,352       $ 6,458       44.8   %
Segment operating income as a percent     26.2    %     23.3    %
of segment revenues
Huron Financial:
Revenues                                $ 8,582       $ 5,849       46.7   %
Operating income                        $ 3,379       $ 233         N/M
Segment operating income as a percent     39.4    %     4.0     %
of segment revenues
All Other:
Revenues                                $ 39          $ 264         (85.2  %)
Operating loss                          $ (172    )   $ (799    )   (78.5  %)
Segment operating loss as a percent       N/M           N/M
of segment revenues
Total Company:
Revenues                                $ 164,036     $ 138,637     18.3   %
Reimbursable expenses                    15,336      13,796     11.2   %
Total revenues and reimbursable         $ 179,372    $ 152,433    17.7   %
expenses
                                                                    
Statement of Earnings reconciliation:
Segment operating income                $ 46,658      $ 31,241      49.3   %
Charges not allocated at the segment
level:
Other selling, general and                20,536        22,951      (10.5  %)
administrative expenses
Depreciation and amortization expense    4,779       4,653      2.7    %
Total operating income                    21,343        3,637       486.8  %
Other expense, net                       1,850       1,533      20.7   %
Income from continuing operations       $ 19,493     $ 2,104      826.5  %
before income tax expense
                                                                    
Other Operating Data (excluding All                            
Other):
Number of full-time billable
consultants (at period end) ^ (1):
Huron Healthcare ^(5)                     870           809         7.5    %
Huron Legal                               151           118         28.0   %
Huron Education and Life Sciences         436           328         32.9   %
Huron Financial                          62          67         (7.5   %)
Total                                     1,519         1,322       14.9   %
Average number of full-time billable
consultants (for the period) ^(1):
Huron Healthcare ^(5)                     863           788
Huron Legal                               146           116
Huron Education and Life Sciences         430           322
Huron Financial                          62          68      
Total                                     1,501         1,294
Full-time billable consultant
utilization rate ^(2):
Huron Healthcare ^(5)                     85.6    %     83.2    %
Huron Legal                               52.0    %     70.7    %
Huron Education and Life Sciences         70.0    %     70.8    %
Huron Financial                           84.7    %     59.6    %
Total                                     77.9    %     77.8    %

HURON CONSULTING GROUP INC.
SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)
(Unaudited)

                                                           Three Months Ended
                                                            March 31,
Other Operating Data (continued):                          2013        2012
Full-time billable consultant average billing rate per                
hour ^(3):
Huron Healthcare ^(5)                                       $  205       $ 192
Huron Legal                                                 $  222       $ 234
Huron Education and Life Sciences                           $  206       $ 212
Huron Financial                                             $  331       $ 275
Total                                                       $  212       $ 203
Revenue per full-time billable consultant (in thousands):
Huron Healthcare ^(5)                                       $  85        $ 74
Huron Legal                                                 $  53        $ 80
Huron Education and Life Sciences                           $  70        $ 73
Huron Financial                                             $  135       $ 81
Total                                                       $  79        $ 74
Average number of full-time equivalents (for the period)
^(4):
Huron Healthcare ^(5)                                          56          62
Huron Legal                                                    1,089       897
Huron Education and Life Sciences                              39          28
Huron Financial                                               2          2
Total                                                          1,186       989
Revenue per full-time equivalents (in thousands):
Huron Healthcare ^(5)                                       $  104       $ 88
Huron Legal                                                 $  31        $ 36
Huron Education and Life Sciences                           $  151       $ 145
Huron Financial                                             $  149       $ 187
Total                                                       $  38        $ 43

(1)  Consists of our full-time professionals who provide consulting services
      and generate revenues based on the number of hours worked.
      
      Utilization rate for our full-time billable consultants is calculated by
      dividing the number of hours all our full-time billable consultants
(2)   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.
      
      Average billing rate per hour for our full-time billable consultants is
(3)   calculated by dividing revenues for a period by the number of hours
      worked on client assignments during the same period.
      
      Consists of consultants who work variable schedules as needed by our
      clients, as well as contract reviewers and other professionals who
(4)   generate revenues primarily based on number of hours worked and units
      produced, such as pages reviewed and data processed. Also includes
      full-time employees who provide software support and maintenance
      services to our clients.
      
      Effective January 1, 2013, a group within the Huron Healthcare segment
      that provides post-implementation services that was previously
(5)   classified as full-time equivalents will be classified as full-time
      billable consultants due to the evolving nature of the services that
      they offer. Prior periods have been restated to reflect this change.
      
N/M   – Not meaningful

HURON CONSULTING GROUP INC.
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION ^(6)
(In thousands)
(Unaudited)
                                                   
                                                     Three Months Ended
                                                     March 31,
                                                     2013         2012
Revenues                                             $ 164,036    $ 138,637 
                                                                   
Net income from continuing operations                $ 11,369      $ 587
Add back:
Income tax expense                                     8,124         1,517
Interest and other expenses                            1,850         1,533
Depreciation and amortization                         5,437       5,795   
Earnings before interest, taxes, depreciation and      26,780        9,432
amortization (EBITDA) ^(6)
Add back:
Restatement related expenses                           -             1,505
Restructuring charges                                  -             830
Litigation settlement gain                            (1,150  )    -       
Adjusted EBITDA ^(6)                                 $ 25,630     $ 11,767  
Adjusted EBITDA as a percentage of revenues ^(6)      15.6    %    8.5     %

HURON CONSULTING GROUP INC.
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS
TO ADJUSTED NET INCOME FROM CONTINUING OPERATIONS ^(6)
(In thousands)
(Unaudited)

                                                      Three Months Ended
                                                       March 31,
                                                        2013      2012   
Net income from continuing operations                  $ 11,369    $ 587    
Weighted average shares - diluted                        22,487       22,164
Diluted earnings per share from continuing             $ 0.51      $ 0.03   
operations
Add back:
Amortization of intangible assets                        1,456        1,619
Restatement related expenses                             -            1,505
Restructuring charges                                    -            830
Litigation settlement gain                               (1,150 )     -
Tax effect                                              (122   )    (1,582 )
Total adjustments, net of tax                           184        2,372  
Adjusted net income from continuing operations ^(6)    $ 11,553    $ 2,959  
Adjusted diluted earnings per share from continuing    $ 0.51      $ 0.13   
operations ^(6)

      In evaluating the Company’s financial performance, management uses
      earnings before interest, taxes, depreciation and amortization
      (“EBITDA”), adjusted EBITDA, adjusted EBITDA as a percentage of
      revenues, adjusted net income from continuing operations, and adjusted
      diluted earnings per share from continuing operations, which are
      non-GAAP measures. Our management uses these non-GAAP financial measures
      to gain an understanding of our comparative operating performance (when
      comparing such results with previous periods or forecasts). These
      non-GAAP financial measures are used by management in their financial
      and operating decision making because management believes they reflect
      our ongoing business in a manner that allows for meaningful
      period-to-period comparisons. Management also uses these non-GAAP
(6)  financial measures when publicly providing our business outlook, for
      internal management purposes, and as a basis for evaluating potential
      acquisitions and dispositions. We believe that these non-GAAP financial
      measures provide useful information to investors and others in
      understanding and evaluating Huron’s current operating performance and
      future prospects in the same manner as management does, if they so
      choose, and in comparing in a consistent manner Huron’s current
      financial results with Huron’s past financial results. Investors should
      recognize that these non-GAAP measures might not be comparable to
      similarly titled measures of other companies. These measures should be
      considered in addition to, and not as a substitute for or superior to,
      any measure of performance, cash flows or liquidity prepared in
      accordance with accounting principles generally accepted in the United
      States.

Contact:

Huron Consulting Group Inc.
Media Contact:
Jennifer Frost Hennagir, 312-880-3260
jfrost-hennagir@huronconsultinggroup.com
or
Investor Contact:
C. Mark Hussey
or
Ellen Wong
312-583-8722
investor@huronconsultinggroup.com
 
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