SECOND QUARTER 2023 HIGHLIGHTS
- Total revenues increased $73.4 million, or 26.9%, to $346.8
million in Q2 2023 from $273.3 million in Q2 2022.
- Net income increased $10.8 million, or 78.1%, to $24.7 million
in Q2 2023 from $13.9 million in Q2 2022.
- Adjusted EBITDA(6), a non-GAAP measure, increased $15.3
million, or 46.0%, to $48.5 million in Q2 2023 from $33.2 million
in Q2 2022.
- Diluted earnings per share increased $0.61, or 92.4%, to $1.27
in Q2 2023 from $0.66 in Q2 2022.
- Adjusted diluted earnings per share(6), a non-GAAP measure,
increased $0.55, or 66.3%, to $1.38 in Q2 2023 from $0.83 in Q2
2022.
- Net cash provided by operating activities was $78.2 million in
Q2 2023, compared to $28.9 million in Q2 2022.
YEAR-TO-DATE 2023 HIGHLIGHTS
- Total revenues increased $131.3 million, or 24.6%, to $664.7
million for the first six months of 2023 from $533.4 million for
the same prior year period.
- Revenues within the Digital capability increased 23.5% to
$290.2 million for the first six months of 2023, compared to $234.9
million for the same prior year period.
- Net income was $38.1 million for the first six months of 2023,
compared to $40.7 million for the same prior year period. Results
for the first six months of 2022 included a non-recurring,
unrealized gain of $19.8 million, net of tax, related to the
company's investment in a hospital-at-home company.
- Adjusted EBITDA(6), a non-GAAP measure, increased $22.7
million, or 40.9%, to $78.0 million for the first six months of
2023 from $55.3 million for the same prior year period.
- Adjusted EBITDA as a percentage of revenues(6), a non-GAAP
measure, increased 130 basis points to 11.7% for the first six
months of 2023 from 10.4% for the same prior year period.
- Diluted earnings per share increased to $1.95 for the first six
months of 2023, compared to $1.94 for the same prior year period
which included the non-recurring, unrealized gain related to the
company's investment in a hospital-at-home company.
- Adjusted diluted earnings per share(6), a non-GAAP measure,
increased $0.93, or 70.5%, to $2.25 for the first six months of
2023 from $1.32 for the same prior year period.
- Huron returned $59.6 million to shareholders in the first six
months of 2023 by repurchasing 0.8 million shares of the company's
common stock.
2023 GUIDANCE
- Huron increases its previous full year 2023 revenue and
earnings guidance ranges, including revenue expectations in a range
of $1.30 billion to $1.34 billion.
Global professional services firm Huron (NASDAQ: HURN) today
announced financial results for the second quarter ended June 30,
2023.
“We continue to drive strong organic growth in each of our three
operating segments while expanding our companywide operating
margin, consistent with our strategy. Revenues grew 27% over the
prior year quarter, reflective of continued demand for our
Consulting and Managed Services and Digital capabilities,” said
Mark Hussey, chief executive officer and president of Huron.
“Our updated annual guidance reflects our outlook for strong
growth in 2023. We are pleased that our performance over the past
six quarters has outpaced our 2022 investor day financial
objectives, and we remain confident in our ability to deliver at or
above those goals in the years ahead,” added Hussey.
SECOND QUARTER 2023 RESULTS
Revenues increased $73.4 million, or 26.9%, to $346.8 million
for the second quarter of 2023, compared to $273.3 million for the
second quarter of 2022. This revenue growth was highlighted by
33.4% growth in the Consulting and Managed Services capability and
19.2% growth in the Digital capability in the aggregate across all
industries during the second quarter of 2023, compared to the same
prior year period; and reflects the company's focus on accelerating
growth in the healthcare and education industries and growing its
presence in commercial industries.
Net income increased $10.8 million, or 78.1%, to $24.7 million
for the second quarter of 2023, compared to $13.9 million for the
same quarter last year. Diluted earnings per share increased $0.61,
or 92.4%, to $1.27 for the second quarter of 2023, compared to
$0.66 for the second quarter of 2022.
Second quarter 2023 earnings before interest, taxes,
depreciation and amortization ("EBITDA")(6) increased $15.9
million, or 50.9%, to $47.1 million, compared to $31.2 million in
the same prior year period.
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
June 30,
2023
2022
Amortization of intangible assets
$
1,974
$
2,818
Restructuring charges
$
1,699
$
2,069
Other losses (gains)
$
(623
)
$
21
Tax effect of adjustments
$
(808
)
$
(1,301
)
Foreign currency transaction losses
(gains), net
$
288
$
(100
)
Adjusted EBITDA(6) increased $15.3 million, or 46.0%, to $48.5
million, or 14.0% of revenues, in the second quarter of 2023,
compared to $33.2 million, or 12.2% of revenues, in the same
quarter last year. Adjusted net income(6) increased $9.5 million,
or 54.2%, to $27.0 million, or $1.38 per diluted share, for the
second quarter of 2023, compared to $17.5 million, or $0.83 per
diluted share, for the same quarter in 2022.
The number of revenue-generating professionals(1) increased
21.9% to 5,174 as of June 30, 2023 from 4,243 as of June 30, 2022.
The utilization rate(5) of the company's Consulting capability
increased to 76.0% during the second quarter 2023, compared to
73.2% during the same period last year. The utilization rate(5) for
the company's Digital capability increased to 74.7% during the
second quarter 2023, compared to 74.3% during the same period last
year.
YEAR-TO-DATE 2023 RESULTS
Revenues increased $131.3 million, or 24.6%, to $664.7 million
for the first six months of 2023, compared to $533.4 million for
the first six months of 2022. This revenue growth was highlighted
by 25.5% growth in the Consulting and Managed Services capability
and 23.5% growth in the Digital capability in the aggregate across
all industries for the first six months of 2023, compared to the
same period last year; and reflects the company's focus on
accelerating growth in the healthcare and education industries and
growing its presence in commercial industries.
Net income was $38.1 million for the first six months of 2023,
compared to $40.7 million for the first six months of 2022. Diluted
earnings per share increased to $1.95 for the first six months of
2023, compared to $1.94 for the same period last year. Results for
the first six months of 2022 included a non-recurring, unrealized
gain of $19.8 million, net of tax, related to the company's
investment in a hospital-at-home company.
EBITDA(6) for the first six months of 2023 was $73.8 million,
compared to $78.7 million in the same prior year period.
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):
Six Months Ended
June 30,
2023
2022
Amortization of intangible assets
$
4,205
$
5,678
Restructuring charges
$
3,983
$
3,624
Other losses (gains)
$
(188
)
$
33
Transaction-related expenses
$
—
$
50
Unrealized gain on preferred stock
investment
$
—
$
(26,964
)
Tax effect of adjustments
$
(2,120
)
$
4,658
Foreign currency transaction losses
(gains), net
$
368
$
(81
)
Adjusted EBITDA(6) increased $22.7 million, or 40.9%, to $78.0
million, or 11.7% of revenues, for the first six months of 2023,
compared to $55.3 million, or 10.4% of revenues, for the same
period last year. Adjusted net income(6) increased $16.2 million,
or 58.3%, to $44.0 million, or $2.25 per diluted share, for the
first six months of 2023, compared to $27.8 million, or $1.32 per
diluted share, for the first six months of 2022.
The number of revenue-generating professionals(1) increased
21.9% to 5,174 as of June 30, 2023 from 4,243 as of June 30, 2022.
The utilization rate(5) of the company's Consulting capability
increased to 76.1% during the first six months of 2023, compared to
72.4% during the same period last year. The utilization rate(5) for
the company's Digital capability was 72.8% during the first six
months 2023, compared to 73.6% during the same period last
year.
Additionally, in the first six months of 2023, Huron repurchased
826,542 shares of the company's common stock for $59.6 million.
OPERATING INDUSTRIES
The company’s year-to-date 2023 revenues by operating segment as
a percentage of total company revenues are as follows: Healthcare
(49%); Education (32%); and Commercial (19%). Financial results by
operating industry are included in the attached schedules and in
Huron's forthcoming Quarterly Report on Form 10-Q filing for the
quarter ended June 30, 2023.
OUTLOOK FOR 2023
Based on currently available information, the company increased
guidance for full year 2023 revenues before reimbursable expenses
to a range of $1.30 billion to $1.34 billion. The company also
anticipates adjusted EBITDA as a percentage of revenues in a range
of 12.0% to 12.5% and non-GAAP adjusted diluted earnings per share
in a range of $4.35 to $4.65.
SECOND QUARTER 2023 WEBCAST
The company will host a webcast to discuss its financial results
today, July 27, 2023, at 5:00 p.m. Eastern Time, 4:00 p.m. Central
Time. The conference call is being webcast by Notified and can be
accessed from 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.
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, and adjusted diluted
earnings per share, 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.
Management has provided its outlook regarding adjusted EBITDA
and adjusted diluted earnings per share, both of which are non-GAAP
financial measures and exclude certain charges. Management has not
reconciled these non-GAAP financial measures to the corresponding
GAAP financial measures because guidance for the various
reconciling items is not provided. Management is unable to provide
guidance for these reconciling items because they cannot determine
their probable significance, as certain items are outside of the
company's control and cannot be reasonably predicted since these
items could vary significantly from period to period. Accordingly,
reconciliations to the corresponding GAAP financial measures are
not available without unreasonable effort.
ABOUT HURON
Huron is a global professional services firm that collaborates
with clients to put possible into practice by creating sound
strategies, optimizing operations, accelerating digital
transformation, and empowering businesses and their people to own
their future. By embracing diverse perspectives, encouraging new
ideas and challenging the status quo, we create sustainable results
for the organizations we serve. Learn more at
www.huronconsultinggroup.com.
Statements in this press release that are not historical in
nature, including those concerning the company’s current
expectations about its future results, are “forward-looking”
statements as defined in Section 21E of the Securities Exchange Act
of 1934, as amended, and the Private Securities Litigation Reform
Act of 1995. Forward-looking statements are identified by words
such as “may,” “should,” “expects,” “provides,” “anticipates,”
“assumes,” “can,” “will,” “meets,” “could,” “likely,” “intends,”
“might,” “predicts,” “seeks,” “would,” “believes,” “estimates,”
“plans,” “continues,” “goals,” “guidance,” or “outlook” or similar
expressions. These forward-looking statements reflect the company's
current expectations about future requirements and needs, results,
levels of activity, performance, or achievements. Some of the
factors that could cause actual results to differ materially from
the forward-looking statements contained herein include, without
limitation: failure to achieve expected utilization rates, billing
rates, and the necessary 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, 2022 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
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Revenues and reimbursable
expenses:
Revenues
$
346,759
$
273,325
$
664,654
$
533,374
Reimbursable expenses
8,140
7,492
16,630
12,218
Total revenues and reimbursable
expenses
354,899
280,817
681,284
545,592
Operating expenses:
Direct costs (exclusive of depreciation
and amortization included below)
235,198
189,233
463,581
376,480
Reimbursable expenses
8,121
7,576
16,745
12,332
Selling, general and administrative
expenses
64,019
46,033
126,308
94,428
Restructuring charges
1,699
2,069
3,983
3,624
Depreciation and amortization
6,143
6,902
12,517
13,766
Total operating expenses
315,180
251,813
623,134
500,630
Operating income
39,719
29,004
58,150
44,962
Other income (expense), net:
Interest expense, net of interest
income
(5,796
)
(2,446
)
(10,099
)
(4,642
)
Other income (expense), net
1,062
(4,881
)
2,781
19,484
Total other income (expense), net
(4,734
)
(7,327
)
(7,318
)
14,842
Income before taxes
34,985
21,677
50,832
59,804
Income tax expense
10,273
7,802
12,701
19,077
Net income
$
24,712
$
13,875
$
38,131
$
40,727
Earnings per share:
Net income per basic share
$
1.30
$
0.67
$
2.00
$
1.97
Net income per diluted share
$
1.27
$
0.66
$
1.95
$
1.94
Weighted average shares used in
calculating earnings per share:
Basic
18,939
20,582
19,029
20,715
Diluted
19,486
20,967
19,598
21,047
Comprehensive income (loss):
Net income
$
24,712
$
13,875
$
38,131
$
40,727
Foreign currency translation adjustments,
net of tax
327
(656
)
379
(699
)
Unrealized gain (loss) on investment, net
of tax
553
773
4,426
(1,888
)
Unrealized gain on cash flow hedging
instruments, net of tax
2,463
971
134
5,296
Other comprehensive income
3,343
1,088
4,939
2,709
Comprehensive income
$
28,055
$
14,963
$
43,070
$
43,436
HURON CONSULTING GROUP
INC.
CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share amounts)
(Unaudited)
June 30, 2023
December 31,
2022
Assets
Current assets:
Cash and cash equivalents
$
16,583
$
11,834
Receivables from clients, net
152,300
147,852
Unbilled services, net
174,409
141,781
Income tax receivable
6,475
960
Prepaid expenses and other current
assets
29,734
26,057
Total current assets
379,501
328,484
Property and equipment, net
23,440
26,107
Deferred income taxes, net
1,397
1,554
Long-term investments
97,227
91,194
Operating lease right-of-use assets
27,829
30,304
Other non-current assets
83,777
73,039
Intangible assets, net
19,188
23,392
Goodwill
624,966
624,966
Total assets
$
1,257,325
$
1,199,040
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
9,720
$
14,254
Accrued expenses and other current
liabilities
27,472
27,268
Accrued payroll and related benefits
126,430
171,723
Current maturities of operating lease
liabilities
11,208
10,530
Deferred revenues
24,703
21,909
Total current liabilities
199,533
245,684
Non-current liabilities:
Deferred compensation and other
liabilities
34,363
33,614
Long-term debt
395,000
290,000
Operating lease liabilities, net of
current portion
41,407
45,556
Deferred income taxes, net
35,404
32,146
Total non-current liabilities
506,174
401,316
Commitments and contingencies
Stockholders’ equity
Common stock; $0.01 par value; 500,000,000
shares authorized; 21,863,932 and 22,507,159 shares issued,
respectively
218
223
Treasury stock, at cost, 2,840,319 and
2,711,712 shares, respectively
(141,407
)
(137,556
)
Additional paid-in capital
279,070
318,706
Retained earnings
390,679
352,548
Accumulated other comprehensive income
23,058
18,119
Total stockholders’ equity
551,618
552,040
Total liabilities and stockholders’
equity
$
1,257,325
$
1,199,040
HURON CONSULTING GROUP
INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
2023
2022
Cash flows from operating
activities:
Net income
$
38,131
$
40,727
Adjustments to reconcile net income to
cash flows from operating activities:
Depreciation and amortization
12,549
13,766
Non-cash lease expense
3,340
3,174
Lease-related impairment charge
2,086
—
Share-based compensation
23,151
15,166
Amortization of debt discount and issuance
costs
382
397
Allowances for doubtful accounts
53
47
Deferred income taxes
1,755
7,089
(Gain) loss on sale of property and
equipment, excluding transaction costs
1
(1,117
)
Change in fair value of contingent
consideration liabilities
(233
)
33
Change in fair value of preferred stock
investment
—
(26,964
)
Changes in operating assets and
liabilities, net of acquisitions and divestiture:
(Increase) decrease in receivables from
clients, net
(4,440
)
(28,825
)
(Increase) decrease in unbilled services,
net
(32,567
)
(28,329
)
(Increase) decrease in current income tax
receivable / payable, net
(6,141
)
9,394
(Increase) decrease in other assets
(4,880
)
3,984
Increase (decrease) in accounts payable
and other liabilities
(5,594
)
(13,524
)
Increase (decrease) in accrued payroll and
related benefits
(44,277
)
(43,420
)
Increase (decrease) in deferred
revenues
2,804
(1,834
)
Net cash used in operating activities
(13,880
)
(50,236
)
Cash flows from investing
activities:
Purchases of property and equipment
(3,725
)
(6,800
)
Investment in life insurance policies
(2,188
)
—
Distributions from life insurance
policies
2,956
—
Purchases of businesses
38
(1,948
)
Capitalization of internally developed
software costs
(12,998
)
(3,974
)
Proceeds from note receivable
154
157
Proceeds from sale of property and
equipment
—
4,750
Divestiture of business
—
207
Net cash used in investing activities
(15,763
)
(7,608
)
Cash flows from financing
activities:
Proceeds from exercise of stock
options
987
1,185
Shares redeemed for employee tax
withholdings
(9,728
)
(7,011
)
Share repurchases
(60,368
)
(52,443
)
Proceeds from bank borrowings
230,000
224,000
Repayments of bank borrowings
(125,000
)
(114,780
)
Payments for debt issuance costs
(58
)
—
Deferred payments on business
acquisition
(1,500
)
(1,875
)
Net cash provided by financing
activities
34,333
49,076
Effect of exchange rate changes on
cash
59
(55
)
Net increase (decrease) in cash and cash
equivalents
4,749
(8,823
)
Cash and cash equivalents at beginning of
the period
11,834
20,781
Cash and cash equivalents at end of the
period
$
16,583
$
11,958
HURON CONSULTING GROUP
INC.
SEGMENT OPERATING RESULTS AND
OTHER OPERATING DATA
(Unaudited)
Three Months
Ended
June 30,
Percent
Increase
(Decrease)
Six Months
Ended
June 30,
Percent
Increase
(Decrease)
Segment and Consolidated Operating
Results (in thousands):
2023
2022
2023
2022
Healthcare:
Revenues
$
173,768
$
128,474
35.3
%
$
322,817
$
250,350
28.9
%
Operating income
$
49,151
$
30,364
61.9
%
$
81,406
$
58,396
39.4
%
Segment operating margin
28.3
%
23.6
%
25.2
%
23.3
%
Education:
Revenues
$
110,694
$
88,225
25.5
%
$
214,841
$
168,887
27.2
%
Operating income
$
27,397
$
21,691
26.3
%
$
50,562
$
35,997
40.5
%
Segment operating margin
24.8
%
24.6
%
23.5
%
21.3
%
Commercial:
Revenues
$
62,297
$
56,626
10.0
%
$
126,996
$
114,137
11.3
%
Operating income
$
10,472
$
11,915
(12.1
)%
$
24,539
$
24,129
1.7
%
Segment operating margin
16.8
%
21.0
%
19.3
%
21.1
%
Total Huron:
Revenues
$
346,759
$
273,325
26.9
%
$
664,654
$
533,374
24.6
%
Reimbursable expenses
8,140
7,492
8.6
%
16,630
12,218
36.1
%
Total revenues and reimbursable
expenses
$
354,899
$
280,817
26.4
%
$
681,284
$
545,592
24.9
%
Segment operating income
$
87,020
$
63,970
36.0
%
$
156,507
$
118,522
32.0
%
Items not allocated at the segment
level:
Other operating expenses
42,923
29,912
43.5
%
89,263
63,460
40.7
%
Depreciation and amortization
4,378
5,054
(13.4
)%
9,094
10,100
(10.0
)%
Total operating income
39,719
29,004
36.9
%
58,150
44,962
29.3
%
Other income (expense), net
(4,734
)
(7,327
)
(35.4
)%
(7,318
)
14,842
N/M
Income before taxes
$
34,985
$
21,677
61.4
%
$
50,832
$
59,804
(15.0
)%
Other Operating Data:
Number of revenue-generating
professionals by segment (at period end) (1):
Healthcare
2,059
1,619
27.2
%
2,059
1,619
27.2
%
Education
1,701
1,407
20.9
%
1,701
1,407
20.9
%
Commercial (2)
1,414
1,217
16.2
%
1,414
1,217
16.2
%
Total
5,174
4,243
21.9
%
5,174
4,243
21.9
%
Revenue by capability:
Consulting and Managed Services (3)
$
197,255
$
147,871
33.4
%
$
374,449
$
298,455
25.5
%
Digital
149,504
125,454
19.2
%
290,205
234,919
23.5
%
Total
$
346,759
$
273,325
26.9
%
$
664,654
$
533,374
24.6
%
Number of revenue-generating
professionals by capability (at period end)(1):
Consulting and Managed Services (4)
2,473
2,018
22.5
%
2,473
2,018
22.5
%
Digital
2,701
2,225
21.4
%
2,701
2,225
21.4
%
Total
5,174
4,243
21.9
%
5,174
4,243
21.9
%
Utilization rate by capability
(5):
Consulting
76.0
%
73.2
%
76.1
%
72.4
%
Digital
74.7
%
74.3
%
72.8
%
73.6
%
(1)
Consists of our full-time consultants who
generate revenues based on the number of hours worked; full-time
equivalents, which consists of coaches and their support staff
within the Culture and Organizational excellence solution,
consultants who work variable schedules as needed by clients, and
full-time employees who provide software support and maintenance
services to clients; and our Healthcare Managed Services employees
who provide revenue cycle billing, collections insurance
verification and change integrity services to clients.
(2)
The majority of our revenue-generating
professionals within our Commercial segment can provide services
across all of our industries, including healthcare and
education.
(3)
Managed Services capability revenues
within our Healthcare segment was $17.3 million and $16.1 million
for the three months ended June 30, 2023 and 2022, respectively;
and $37.1 million and $29.9 million for the six months ended June
30, 2023 and 2022, respectively.
Managed Services capability revenues
within our Education segment was $4.9 million and $3.9 million for
the three months ended June 30, 2023 and 2022, respectively; and
$9.6 million and $7.3 million for the six months ended June 30,
2023 and 2022, respectively.
(4)
The number of Managed Services
revenue-generating professionals within our Healthcare segment as
of June 30, 2023 and 2022 was 772 and 504, respectively.
The number of Managed Services
revenue-generating professionals within our Education segment as of
June 30, 2023 and 2022 was 106 and 96, respectively.
(5)
Utilization rate is calculated by dividing
the number of hours our billable consultants worked on client
assignments during a period by the total available working hours
for these billable consultants during the same period. Available
hours are determined by the standard hours worked by each billable
consultant, adjusted for part-time hours, and U.S. standard work
weeks. Available working hours exclude local country holidays and
vacation days. Utilization rates are presented for our
revenue-generating professionals who primarily bill on an hourly
basis. We have not presented utilization rates for our Managed
Services professionals as most of the revenues generated by these
employees are not billed on an hourly basis.
HURON CONSULTING GROUP
INC.
RECONCILIATION OF NET
INCOME
TO ADJUSTED EARNINGS BEFORE
INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (6)
(In thousands)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Revenues
$
346,759
$
273,325
$
664,654
$
533,374
Net income
$
24,712
$
13,875
$
38,131
$
40,727
Add back:
Income tax expense
10,273
7,802
12,701
19,077
Interest expense, net of interest
income
5,796
2,446
10,099
4,642
Depreciation and amortization
6,330
7,097
12,883
14,219
Earnings before interest, taxes,
depreciation and amortization (EBITDA) (6)
47,111
31,220
73,814
78,665
Add back:
Restructuring charges
1,699
2,069
3,983
3,624
Other losses (gains)
(623
)
21
(188
)
33
Transaction-related expenses
—
—
—
50
Unrealized gain on preferred stock
investment
—
—
—
(26,964
)
Foreign currency transaction losses
(gains), net
288
(100
)
368
(81
)
Adjusted EBITDA (6)
$
48,475
$
33,210
$
77,977
$
55,327
Adjusted EBITDA as a percentage of
revenues (6)
14.0
%
12.2
%
11.7
%
10.4
%
HURON CONSULTING GROUP
INC.
RECONCILIATION OF NET INCOME
TO ADJUSTED NET INCOME (6)
(In thousands, except per
share amounts)
(Unaudited)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Net income
$
24,712
$
13,875
$
38,131
$
40,727
Weighted average shares -
diluted
19,486
20,967
19,598
21,047
Diluted earnings per share
$
1.27
$
0.66
$
1.95
$
1.94
Add back:
Amortization of intangible assets
1,974
2,818
4,205
5,678
Restructuring charges
1,699
2,069
3,983
3,624
Other losses (gains)
(623
)
21
(188
)
33
Transaction-related expenses
—
—
—
50
Unrealized gain on preferred stock
investment
—
—
—
(26,964
)
Tax effect of adjustments
(808
)
(1,301
)
(2,120
)
4,658
Total adjustments, net of tax
2,242
3,607
5,880
(12,921
)
Adjusted net income (6)
$
26,954
$
17,482
$
44,011
$
27,806
Adjusted weighted average shares -
diluted
19,486
20,967
19,598
21,047
Adjusted diluted earnings per share
(6)
$
1.38
$
0.83
$
2.25
$
1.32
(6)
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, and adjusted diluted earnings per share, 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230727411171/en/
MEDIA CONTACT Allie Bovis abovis@hcg.com
INVESTOR CONTACT John D. Kelly investor@hcg.com
Huron Consulting (NASDAQ:HURN)
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