Huron Consulting Group Announces Second Quarter 2013 Financial Results

Huron Consulting Group Announces Second Quarter 2013 Financial Results

• Revenues increased 17.8% to $170.4 million for Q2 2013 compared to $144.7 million in Q2 2012.

• Operating income increased 107% to $30.5 million for Q2 2013 compared to $14.7 million in Q2 2012.

• Adjusted EBITDA⁽⁶⁾, a non-GAAP measure, increased 70.8% to $36.7 million in Q2 2013 compared to $21.5 million in Q2 2012.

• Diluted earnings per share from continuing operations for Q2 2013 was $0.69 compared to $0.28 in Q2 2012.

• Adjusted diluted earnings per share from continuing operations⁽⁶⁾, a non-GAAP measure, was $0.75 in Q2 2013 compared to $0.37 in Q2 2012.

• Company raises its 2013 full year revenue guidance to a range of $670.0 million to $690.0 million and GAAP diluted earnings per share to a range of $2.35 to $2.50.

CHICAGO--(BUSINESS WIRE)-- Huron Consulting Group Inc. (NAS: HURN) , a leading provider of business consulting services, today announced financial results for the second quarter ended June 30, 2013.

"Huron's strong performance in the second quarter reflects solid demand for our health and education solutions," said James H. Roth, chief executive officer and president, Huron Consulting Group. "The continued market pressures on our health and education clients to increase quality and reduce costs are the fundamental drivers behind Huron's operating performance. The pace of change and demand for our services within our core markets are likely to drive future growth, and we are pleased that the quality of our personnel and the value we deliver remain well-recognized in the marketplace."

Second Quarter 2013 Results

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

Revenues for the second quarter of 2013 were $170.4 million, an increase of 17.8% compared to $144.7 million for the second quarter of 2012. The Company's second quarter 2013 operating income was $30.5 million, compared to $14.7 million in the second quarter of 2012. Net income from continuing operations was $15.8 million, or $0.69 per diluted share, for the second quarter of 2013, compared to $6.3 million, or $0.28 per diluted share, for the same period last year.

Second quarter 2013 earnings before interest, taxes, depreciation and amortization ("EBITDA")⁽⁶⁾ was $36.1 million, or 21.2% of revenues, compared to $19.9 million, or 13.8% of revenues, in the comparable quarter last year.

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

Adjusted EBITDA⁽⁶⁾ was $36.7 million, or 21.5% of revenues, in the second quarter of 2013, compared to $21.5 million, or 14.9% of revenues, in the comparable quarter last year. Adjusted net income⁽⁶⁾ from continuing operations was $17.0 million, or $0.75 per diluted share, for the second quarter of 2013 compared to $8.2 million, or $0.37 per diluted share, for the comparable period in 2012.

The average number of full-time billable consultants⁽¹⁾ was 1,532 in the second quarter of 2013 compared to 1,349 in the same quarter last year. Full-time billable consultant utilization rate⁽²⁾ was 76.9% during the second quarter of 2013 compared with 74.6% during the same period last year. Average billing rate per hour for full-time billable consultants⁽³⁾ was $213 for the second quarter of 2013 compared to $208 for the second quarter of 2012. The average number of full-time equivalent professionals⁽⁴⁾ totaled 1,087 in the second quarter of 2013 compared to 1,041 for the comparable period in 2012.

Year-to-Date Results

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

Revenues for the first six months of 2013 were $334.4 million, an increase of 18.0% compared to $283.3 million for the first half of 2012. The Company's operating income for the first six months of 2013 was $51.9 million compared to $18.3 million in the first six months of 2012. Net income from continuing operations was $27.2 million, or $1.20 per diluted share, for the first six months of 2013 compared to $6.9 million, or $0.31 per diluted share, for the same period last year.

EBITDA⁽⁶⁾ was $62.9 million, or 18.8% of revenues, for the first half of 2013 compared to $29.3 million, or 10.4% of revenues, for the same period in 2012.

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

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 appealed the grant of Huron's motion for summary judgment and the Company filed a cross appeal of an earlier denial of a motion to dismiss filed by Huron.

Adjusted EBITDA⁽⁶⁾ was $62.3 million, or 18.6% of revenues, in the first six months of 2013 compared to $33.3 million, or 11.7% of revenues, in the comparable period last year.

Adjusted net income from continuing operations⁽⁶⁾ was $28.6 million, or $1.26 per diluted share, for the first half of 2013 compared to $11.2 million, or $0.50 per diluted share, for the comparable period in 2012.

Reconciliations of the aforementioned non-GAAP financial measures to comparable GAAP measures are provided in the financial schedules accompanying this news release.

The average number of full-time billable consultants⁽¹⁾ was 1,517 in the first half of 2013 compared to 1,321 in the same period last year. Full-time billable consultant utilization rate⁽²⁾ was 77.4% during the first half of 2013 compared with 76.2% during the same period last year. Average billing rate per hour for full-time billable consultants⁽³⁾ was $213 for the first half of 2013 compared to $205 for the first half of 2012. The average number of full-time equivalent professionals⁽⁴⁾ was 1,135 in the first half of 2013 compared to 1,017 in the same period in 2012.

Operating Segments

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

The Company's year-to-date revenues by operating segment are as follows: Huron Healthcare (47%); Huron Legal (26%); 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 June 30, 2013.

Outlook for 2013⁽⁷⁾

Based on currently available information, the Company raises guidance, which was previously announced on February 20, 2013, for full year 2013 revenues before reimbursable expenses in a range of $670.0 million to $690.0 million. The Company also anticipates EBITDA in a range of $124.5 million to $130.5 million, Adjusted EBITDA in a range of $124.0 million to $130.0 million, GAAP diluted earnings per share in a range of $2.35 to $2.50, and non-GAAP adjusted diluted earnings per share in a range of $2.55 to $2.70.

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

Second Quarter 2013 Webcast

The Company will host a webcast to discuss its financial results today, July 30, 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, operations, strategy and technology 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 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," "will," "meets," "could," "likely," "intends," "might," "predicts," "seeks," "would," "believes," "estimates," "plans" or "continues." These forward-looking statements reflect our current expectations 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.