THIRD QUARTER 2023 FINANCIAL HIGHLIGHTS
- Total revenues increased $72.8 million, or 25.5%, to $358.2
million in Q3 2023 from $285.4 million in Q3 2022.
- Net income increased $3.8 million, or 21.3%, to $21.5 million
in Q3 2023 from $17.7 million in Q3 2022.
- Adjusted EBITDA(6), a non-GAAP measure, increased $11.5
million, or 31.6%, to $48.0 million in Q3 2023 from $36.5 million
in Q3 2022.
- Diluted earnings per share increased $0.24, or 27.9%, to $1.10
in Q3 2023 from $0.86 in Q3 2022.
- Adjusted diluted earnings per share(6), a non-GAAP measure,
increased $0.38, or 37.6%, to $1.39 in Q3 2023 from $1.01 in Q3
2022.
- Net cash provided by operating activities increased 54.7% to
$68.8 million in Q3 2023, compared to $44.5 million in Q3
2022.
YEAR-TO-DATE 2023 FINANCIAL HIGHLIGHTS AND 2023
GUIDANCE
- Total revenues increased $204.1 million, or 24.9%, to $1.02
billion for the first nine months of 2023 from $818.7 million for
the same prior year period.
- Revenues within all segments increased; led by Healthcare, the
company's largest segment, which increased 31.5% to $502.0 million
for the first nine months of 2023, compared to $381.7 million for
the same prior year period.
- Net income increased $1.2 million, or 2.0%, to $59.6 million
for the first nine months of 2023, compared to $58.5 million for
the same prior year period. Results for the first nine 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 $34.2
million, or 37.2%, to $126.0 million for the first nine months of
2023 from $91.8 million for the same prior year period.
- Adjusted EBITDA as a percentage of revenues(6), a non-GAAP
measure, increased 110 basis points to 12.3% for the first nine
months of 2023 from 11.2% for the same prior year period.
- Diluted earnings per share increased $0.25, or 8.9%, to $3.05
for the first nine months of 2023, compared to $2.80 for the same
prior year period which included the non-recurring, unrealized gain
of $19.8 million, net of tax, related to the company's investment
in a hospital-at-home company.
- Adjusted diluted earnings per share(6), a non-GAAP measure,
increased $1.32, or 56.9%, to $3.64 for the first nine months of
2023 from $2.32 for the same prior year period.
- Huron returned $88.4 million to shareholders in the first nine
months of 2023 by repurchasing 1.1 million shares of the company's
common stock.
- Huron increases its previous full year 2023 revenue and
earnings guidance ranges, including revenue expectations in a range
of $1.35 billion to $1.37 billion.
OTHER HIGHLIGHT
- For the 13th consecutive year in a row, Huron is named by
Consulting magazine as a "Best Firm to Work For," recognizing the
firm's commitment to its people and fostering a collaborative and
inclusive culture.
Global professional services firm Huron (NASDAQ: HURN) today
announced financial results for the third quarter ended September
30, 2023.
“Huron's strong performance continued in the third quarter with
revenues growing 26% over the prior year quarter and a ninth
consecutive quarter of year-over-year margin expansion. In the
first nine months of 2023, revenues grew organically across all
three operating segments, led by 32% growth in the Healthcare
segment, our largest business,” said Mark Hussey, chief executive
officer and president of Huron. “Our results and increased guidance
reflect ongoing strong demand for our broad portfolio of offerings,
our deep industry expertise, and our highly talented team. Our
third quarter results continue our strong multi-year performance
and further demonstrate our ability to drive more sustainable
revenue growth and margin expansion across our business.”
THIRD QUARTER 2023 RESULTS
Revenues increased $72.8 million, or 25.5%, to $358.2 million
for the third quarter of 2023, compared to $285.4 million for the
third quarter of 2022. This revenue growth was highlighted by 37.7%
growth in the Consulting and Managed Services capability in the
aggregate across all segments and growth in the Education and
Healthcare segments' Digital capability of 22.7% and 13.9%,
respectively, during the third 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.
Net income increased $3.8 million, or 21.3%, to $21.5 million
for the third quarter of 2023, compared to $17.7 million for the
same quarter last year. Diluted earnings per share increased $0.24,
or 27.9%, to $1.10 for the third quarter of 2023, compared to $0.86
for the third quarter of 2022.
Third quarter 2023 earnings before interest, taxes, depreciation
and amortization ("EBITDA")(6) increased $7.1 million, or 20.0%, to
$42.6 million, compared to $35.5 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
September 30,
2023
2022
Amortization of intangible assets
$
1,997
$
2,818
Restructuring charges
$
5,402
$
1,332
Other gains, net
$
(14
)
$
(67
)
Transaction-related expenses
$
302
$
—
Tax effect of adjustments
$
(2,037
)
$
(1,082
)
Foreign currency transaction gains,
net
$
(332
)
$
(328
)
Adjusted EBITDA(6) increased $11.5 million, or 31.6%, to $48.0
million, or 13.4% of revenues, in the third quarter of 2023,
compared to $36.5 million, or 12.8% of revenues, in the same
quarter last year. Adjusted net income(6) increased $6.4 million,
or 31.0%, to $27.2 million, or $1.39 per diluted share, for the
third quarter of 2023, compared to $20.7 million, or $1.01 per
diluted share, for the same quarter in 2022.
The number of revenue-generating professionals(1) increased
16.8% to 5,341 as of September 30, 2023 from 4,571 as of September
30, 2022. The utilization rate(5) of the company's Consulting
capability increased to 77.3% during the third quarter 2023,
compared to 72.5% during the same period last year. The utilization
rate(5) for the company's Digital capability increased to 75.4%
during the third quarter 2023, compared to 70.1% during the same
period last year.
YEAR-TO-DATE 2023 RESULTS
Revenues increased $204.1 million, or 24.9%, to $1.02 billion
for the first nine months of 2023, compared to $818.7 million for
the first nine months of 2022. This revenue growth was highlighted
by 29.7% growth in the Consulting and Managed Services capability
and 19.0% growth in the Digital capability in the aggregate across
all industries; 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 $1.2 million, or 2.0%, to $59.6 million for
the first nine months of 2023, compared to $58.5 million for the
first nine months of 2022. Diluted earnings per share increased
$0.25, or 8.9%, to $3.05 for the first nine months of 2023,
compared to $2.80 for the same period last year. Results for the
first nine 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 nine months of 2023 increased $2.3
million, or 2.0%, to $116.5 million; compared to $114.2 million in
the same prior year period which included the non-recurring,
pre-tax unrealized gain of $27.0 million related to the company's
investment in a hospital-at-home company.
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):
Nine Months Ended
September 30,
2023
2022
Amortization of intangible assets
$
6,202
$
8,496
Restructuring charges
$
9,385
$
4,956
Other gains, net
$
(202
)
$
(34
)
Transaction-related expenses
$
302
$
50
Unrealized gain on preferred stock
investment
$
—
$
(26,964
)
Tax effect of adjustments
$
(4,157
)
$
3,576
Foreign currency transaction losses
(gains), net
$
36
$
(409
)
Adjusted EBITDA(6) increased $34.2 million, or 37.2%, to $126.0
million, or 12.3% of revenues, for the first nine months of 2023,
compared to $91.8 million, or 11.2% of revenues, for the same
period last year. Adjusted net income(6) increased $22.6 million,
or 46.6%, to $71.2 million, or $3.64 per diluted share, for the
first nine months of 2023, compared to $48.5 million, or $2.32 per
diluted share, for the first nine months of 2022.
The number of revenue-generating professionals(1) increased
16.8% to 5,341 as of September 30, 2023 from 4,571 as of September
30, 2022. The utilization rate(5) of the company's Consulting
capability increased to 76.5% during the first nine months of 2023,
compared to 73.0% during the same period last year. The utilization
rate(5) of the company's Digital capability increased to 73.7%
during the first nine months 2023, compared to 71.6% during the
same period last year.
Additionally, in the first nine months of 2023, Huron
repurchased 1,116,830 shares of the company's common stock for
$88.4 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 September 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 $1.35 billion to $1.37 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 $4.70 to $4.90.
THIRD QUARTER 2023 WEBCAST
The company will host a webcast to discuss its financial results
today, November 2, 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
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Revenues and reimbursable
expenses:
Revenues
$
358,178
$
285,370
$
1,022,832
$
818,744
Reimbursable expenses
9,288
6,816
25,918
19,034
Total revenues and reimbursable
expenses
367,466
292,186
1,048,750
837,778
Operating expenses:
Direct costs (exclusive of depreciation
and amortization included below)
244,774
193,368
708,355
569,848
Reimbursable expenses
9,497
6,917
26,242
19,249
Selling, general and administrative
expenses
64,347
54,458
190,655
148,886
Restructuring charges
5,402
1,332
9,385
4,956
Depreciation and amortization
6,104
6,812
18,621
20,578
Total operating expenses
330,124
262,887
953,258
763,517
Operating income
37,342
29,299
95,492
74,261
Other income (expense), net:
Interest expense, net of interest
income
(5,047
)
(3,111
)
(15,146
)
(7,753
)
Other income (expense), net
(1,000
)
(785
)
1,781
18,699
Total other income (expense), net
(6,047
)
(3,896
)
(13,365
)
10,946
Income before taxes
31,295
25,403
82,127
85,207
Income tax expense
9,779
7,662
22,480
26,739
Net income
$
21,516
$
17,741
$
59,647
$
58,468
Earnings per share:
Net income per basic share
$
1.15
$
0.88
$
3.15
$
2.85
Net income per diluted share
$
1.10
$
0.86
$
3.05
$
2.80
Weighted average shares used in
calculating earnings per share:
Basic
18,770
20,109
18,941
20,511
Diluted
19,475
20,615
19,578
20,899
Comprehensive income (loss):
Net income
$
21,516
$
17,741
$
59,647
$
58,468
Foreign currency translation adjustments,
net of tax
(662
)
(1,034
)
(283
)
(1,733
)
Unrealized gain (loss) on investment, net
of tax
(1,350
)
(830
)
3,076
(2,718
)
Unrealized gain (loss) on cash flow
hedging instruments, net of tax
(368
)
3,762
(234
)
9,058
Other comprehensive income (loss)
(2,380
)
1,898
2,559
4,607
Comprehensive income
$
19,136
$
19,639
$
62,206
$
63,075
HURON CONSULTING GROUP
INC.
CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
and per share amounts)
(Unaudited)
September 30,
December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
9,398
$
11,834
Receivables from clients, net
166,330
147,852
Unbilled services, net
192,853
141,781
Income tax receivable
4,500
960
Prepaid expenses and other current
assets
32,450
26,057
Total current assets
405,531
328,484
Property and equipment, net
22,919
26,107
Deferred income taxes, net
1,735
1,554
Long-term investments
95,387
91,194
Operating lease right-of-use assets
23,441
30,304
Other non-current assets
87,486
73,039
Intangible assets, net
20,090
23,392
Goodwill
625,711
624,966
Total assets
$
1,282,300
$
1,199,040
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
11,987
$
14,254
Accrued expenses and other current
liabilities
31,591
27,268
Accrued payroll and related benefits
183,872
171,723
Current maturities of operating lease
liabilities
11,116
10,530
Deferred revenues
26,217
21,909
Total current liabilities
264,783
245,684
Non-current liabilities:
Deferred compensation and other
liabilities
32,700
33,614
Long-term debt
358,000
290,000
Operating lease liabilities, net of
current portion
39,207
45,556
Deferred income taxes, net
34,256
32,146
Total non-current liabilities
464,163
401,316
Commitments and contingencies
Stockholders’ equity
Common stock; $0.01 par value; 500,000,000
shares authorized; 21,597,274 and 22,507,159 shares issued,
respectively
215
223
Treasury stock, at cost, 2,848,126 and
2,711,712 shares, respectively
(141,729
)
(137,556
)
Additional paid-in capital
261,995
318,706
Retained earnings
412,195
352,548
Accumulated other comprehensive income
20,678
18,119
Total stockholders’ equity
553,354
552,040
Total liabilities and stockholders’
equity
$
1,282,300
$
1,199,040
HURON CONSULTING GROUP
INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
2023
2022
Cash flows from operating
activities:
Net income
$
59,647
$
58,468
Adjustments to reconcile net income to
cash flows from operating activities:
Depreciation and amortization
18,653
20,578
Non-cash lease expense
4,840
4,768
Lease-related impairment charges
5,584
—
Share-based compensation
35,398
23,083
Amortization of debt discount and issuance
costs
577
595
Allowances for doubtful accounts
53
47
Deferred income taxes
890
7,133
Gain on sale of property and equipment,
excluding transaction costs
(61
)
(1,117
)
Change in fair value of contingent
consideration liabilities
(251
)
(34
)
Change in fair value of preferred stock
investment
—
(26,964
)
Other, net
—
6
Changes in operating assets and
liabilities, net of acquisitions and divestiture:
(Increase) decrease in receivables from
clients, net
(18,508
)
(44,759
)
(Increase) decrease in unbilled services,
net
(51,092
)
(31,937
)
(Increase) decrease in current income tax
receivable / payable, net
(4,365
)
14,704
(Increase) decrease in other assets
(6,243
)
3,468
Increase (decrease) in accounts payable
and other liabilities
(5,361
)
(14,538
)
Increase (decrease) in accrued payroll and
related benefits
10,805
(18,883
)
Increase (decrease) in deferred
revenues
4,328
(397
)
Net cash provided by (used in) operating
activities
54,894
(5,779
)
Cash flows from investing
activities:
Purchases of property and equipment
(5,147
)
(9,768
)
Investment in life insurance policies
(2,601
)
(283
)
Distributions from life insurance
policies
2,956
2,958
Purchases of businesses
(1,613
)
(1,948
)
Capitalization of internally developed
software costs
(19,610
)
(6,855
)
Proceeds from note receivable
154
157
Proceeds from sale of property and
equipment
62
4,753
Divestiture of business
—
207
Net cash used in investing activities
(25,799
)
(10,779
)
Cash flows from financing
activities:
Proceeds from exercises of stock
options
987
1,421
Shares redeemed for employee tax
withholdings
(10,050
)
(7,540
)
Share repurchases
(88,897
)
(95,474
)
Proceeds from bank borrowings
292,000
287,000
Repayments of bank borrowings
(224,000
)
(178,780
)
Payments for debt issuance costs
(58
)
—
Deferred payments on business
acquisition
(1,500
)
(1,875
)
Net cash provided by (used in) financing
activities
(31,518
)
4,752
Effect of exchange rate changes on
cash
(13
)
(144
)
Net decrease in cash and cash
equivalents
(2,436
)
(11,950
)
Cash and cash equivalents at beginning of
the period
11,834
20,781
Cash and cash equivalents at end of the
period
$
9,398
$
8,831
HURON CONSULTING GROUP
INC.
SEGMENT OPERATING RESULTS AND
OTHER OPERATING DATA
(Unaudited)
Three Months Ended
September 30,
Percent
Increase
Nine Months Ended
September 30,
Percent
Increase
Segment and Consolidated Operating
Results (in thousands):
2023
2022
(Decrease)
2023
2022
(Decrease)
Healthcare:
Revenues
$
179,177
$
131,319
36.4%
$
501,994
$
381,669
31.5%
Operating income
$
46,888
$
33,045
41.9%
$
128,294
$
91,441
40.3%
Segment operating margin
26.2
%
25.2
%
25.6
%
24.0
%
Education:
Revenues
$
111,043
$
94,347
17.7%
$
325,884
$
263,234
23.8%
Operating income
$
26,550
$
22,851
16.2%
$
77,112
$
58,848
31.0%
Segment operating margin
23.9
%
24.2
%
23.7
%
22.4
%
Commercial:
Revenues
$
67,958
$
59,704
13.8%
$
194,954
$
173,841
12.1%
Operating income
$
15,432
$
14,153
9.0%
$
39,971
$
38,282
4.4%
Segment operating margin
22.7
%
23.7
%
20.5
%
22.0
%
Total Huron:
Revenues
$
358,178
$
285,370
25.5%
$
1,022,832
$
818,744
24.9%
Reimbursable expenses
9,288
6,816
36.3%
25,918
19,034
36.2%
Total revenues and reimbursable
expenses
$
367,466
$
292,186
25.8%
$
1,048,750
$
837,778
25.2%
Segment operating income
$
88,870
$
70,049
26.9%
$
245,377
$
188,571
30.1%
Items not allocated at the segment
level:
Other operating expenses
43,086
34,875
23.5%
129,563
96,376
34.4%
Restructuring charges
4,095
804
N/M
6,881
2,763
N/M
Depreciation and amortization
4,347
5,071
(14.3)%
13,441
15,171
(11.4)%
Total operating income
37,342
29,299
27.5%
95,492
74,261
28.6%
Other income (expense), net
(6,047
)
(3,896
)
55.2%
(13,365
)
10,946
N/M
Income before taxes
$
31,295
$
25,403
23.2%
$
82,127
$
85,207
(3.6)%
Other Operating Data:
Number of revenue-generating
professionals by segment (at period end) (1):
Healthcare
2,083
1,686
23.5%
2,083
1,686
23.5%
Education
1,799
1,543
16.6%
1,799
1,543
16.6%
Commercial (2)
1,459
1,342
8.7%
1,459
1,342
8.7%
Total
5,341
4,571
16.8%
5,341
4,571
16.8%
Revenue by capability:
Consulting and Managed Services (3)
$
214,688
$
155,901
37.7%
$
589,137
$
454,356
29.7%
Digital
143,490
129,469
10.8%
433,695
364,388
19.0%
Total
$
358,178
$
285,370
25.5%
$
1,022,832
$
818,744
24.9%
Number of revenue-generating
professionals by capability (at period end)(1):
Consulting and Managed Services (4)
2,483
2,098
18.4%
2,483
2,098
18.4%
Digital
2,858
2,473
15.6%
2,858
2,473
15.6%
Total
5,341
4,571
16.8%
5,341
4,571
16.8%
Utilization rate by capability
(5):
Consulting
77.3
%
72.5
%
76.5
%
73.0
%
Digital
75.4
%
70.1
%
73.7
%
71.6
%
(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 $16.7 million and $17.6 million
for the three months ended September 30, 2023 and 2022,
respectively; and $53.8 million and $47.5 million for the nine
months ended September 30, 2023 and 2022, respectively.
Managed Services capability revenues
within our Education segment was $5.0 million and $4.1 million for
the three months ended September 30, 2023 and 2022, respectively;
and $14.6 million and $11.3 million for the nine months ended
September 30, 2023 and 2022, respectively.
(4)
The number of Managed Services
revenue-generating professionals within our Healthcare segment as
of September 30, 2023 and 2022 was 757 and 547, respectively.
The number of Managed Services
revenue-generating professionals within our Education segment as of
September 30, 2023 and 2022 was 105 and 97, 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
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Revenues
$
358,178
$
285,370
$
1,022,832
$
818,744
Net income
$
21,516
$
17,741
$
59,647
$
58,468
Add back:
Income tax expense
9,779
7,662
22,480
26,739
Interest expense, net of interest
income
5,047
3,111
15,146
7,753
Depreciation and amortization
6,300
7,019
19,183
21,238
Earnings before interest, taxes,
depreciation and amortization (EBITDA) (6)
42,642
35,533
116,456
114,198
Add back:
Restructuring charges
5,402
1,332
9,385
4,956
Other gains, net
(14
)
(67
)
(202
)
(34
)
Transaction-related expenses
302
—
302
50
Unrealized gain on preferred stock
investment
—
—
—
(26,964
)
Foreign currency transaction losses
(gains), net
(332
)
(328
)
36
(409
)
Adjusted EBITDA (6)
$
48,000
$
36,470
$
125,977
$
91,797
Adjusted EBITDA as a percentage of
revenues (6)
13.4
%
12.8
%
12.3
%
11.2
%
HURON CONSULTING GROUP
INC.
RECONCILIATION OF NET INCOME
TO ADJUSTED NET INCOME (6)
(In thousands, except per
share amounts)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
Net income
$
21,516
$
17,741
$
59,647
$
58,468
Weighted average shares -
diluted
19,475
20,615
19,578
20,899
Diluted earnings per share
$
1.10
$
0.86
$
3.05
$
2.80
Add back:
Amortization of intangible assets
1,997
2,818
6,202
8,496
Restructuring charges
5,402
1,332
9,385
4,956
Other gains, net
(14
)
(67
)
(202
)
(34
)
Transaction-related expenses
302
—
302
50
Unrealized gain on preferred stock
investment
—
—
—
(26,964
)
Tax effect of adjustments
(2,037
)
(1,082
)
(4,157
)
3,576
Total adjustments, net of tax
5,650
3,001
11,530
(9,920
)
Adjusted net income (6)
$
27,166
$
20,742
$
71,177
$
48,548
Adjusted weighted average shares -
diluted
19,475
20,615
19,578
20,899
Adjusted diluted earnings per share
(6)
$
1.39
$
1.01
$
3.64
$
2.32
(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/20231102647150/en/
MEDIA CONTACT Allie Bovis abovis@hcg.com
INVESTOR CONTACT John D. Kelly investor@hcg.com
Huron Consulting (NASDAQ:HURN)
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