Huron Announces Fourth Quarter and Record Full Year 2023 Financial Results, Increases Borrowing Capacity with $275 Million Term Loan, and Provides 2024 Guidance
- Total revenues increased by $25.5 million, or 8.1%, to $339.2 million in Q4 2023 compared to $313.7 million in Q4 2022.
- Net income was $2.8 million in Q4 2023 compared to $17.1 million in Q4 2022.
- Adjusted EBITDA increased by $2.3 million, or 5.9%, to $41.4 million in Q4 2023 from $39.0 million in Q4 2022.
- Diluted earnings per share was $0.15 in Q4 2023 compared to $0.85 in Q4 2022.
- For full year 2023, total revenues increased by $229.6 million, or 20.3%, to $1.36 billion compared to $1.13 billion in 2022.
- Net income was $62.5 million for 2023 compared to $75.6 million for 2022.
- Adjusted EBITDA increased by $36.5 million, or 27.9%, to $167.3 million for 2023 from $130.8 million for 2022.
- Huron repurchased 1.5 million shares of common stock in 2023, returning $123.6 million to shareholders.
- Huron provided guidance for 2024 with revenue expectations in a range of $1.46 billion to $1.54 billion.
- Huron amended its credit facility to include a $275 million term loan to support growth strategies.
- Huron was recognized as a 'Best Place to Work' by Glassdoor and received a perfect score on the HRC Foundation's Corporate Equality Index.
- Net income decreased in Q4 2023 compared to the previous year.
- Results for Q4 2023 include a non-cash unrealized loss related to the company's investment in a hospital-at-home company.
- Diluted earnings per share saw a decrease in Q4 2023.
- The utilization rate of the company's Consulting capability decreased in Q4 2023 compared to the same period last year.
Insights
The reported increase in total revenues for both Q4 and the full year signifies a robust growth trajectory for the company, particularly in its largest segment, Healthcare. This sector's expansion by 26.0% is indicative of a successful strategic focus, likely capitalizing on industry trends such as digital transformation and an increased demand for healthcare services. The revenue growth is a positive signal to investors, as it suggests scalability and potential market share gains.
However, the significant non-cash unrealized loss from the investment in a hospital-at-home company, adversely affecting net income and diluted earnings per share, raises questions about the company's investment strategy and risk management practices. While such investments can be strategic, their volatility may concern investors focused on steady earnings growth. The repurchase of shares is a bullish signal, indicating management's confidence in the intrinsic value of the company, potentially offsetting some investor concerns regarding the investment loss.
The provided guidance for 2024, with an expected increase in revenue and adjusted EBITDA margins, suggests a positive outlook, reinforcing the company's growth narrative. However, the impact of the term loan on the company's leverage and interest expenses will be an area to monitor closely, as it could affect future profitability and cash flows.
Observing the company's performance across its operating segments, particularly the significant growth within the Healthcare and Education segments, reflects a strategic alignment with current market demands. The increased focus on digital capabilities, as evidenced by a 19% growth in the Digital capability within Healthcare, aligns with the broader trend of digitalization in professional services. This strategic positioning is likely to enhance the company's competitive edge and market relevance.
The reported utilization rates for Consulting and Digital capabilities, both showing year-over-year increases, indicate efficient resource management and a healthy demand for services. This is a critical performance metric for professional services firms, as it directly affects profitability and can be a leading indicator of revenue trends.
The macroeconomic implications of the company's financial results and strategic decisions, such as amending its credit facility to include a term loan, can be multifaceted. On one hand, this move may signal a proactive approach to capital management, potentially fueling further growth and shareholder returns. On the other hand, it increases the company's debt exposure, which could be a concern if economic conditions deteriorate and interest rates rise, leading to higher debt servicing costs.
Moreover, the company's performance, with revenue growth outpacing net income growth due to investment losses, mirrors broader economic trends where companies are pursuing growth, sometimes at the expense of short-term profitability. The emphasis on digital capabilities also reflects the ongoing digital transformation across industries, which has been accelerated by the pandemic and shifts in consumer and business behavior.
FOURTH QUARTER 2023 FINANCIAL HIGHLIGHTS
-
Total revenues increased
$25.5 million 8.1% , to$339.2 million $313.7 million
-
Net income was
$2.8 million $17.1 million $19.4 million
-
Adjusted EBITDA(7), a non-GAAP measure, increased
$2.3 million 5.9% , to$41.4 million $39.0 million
-
Diluted earnings per share was
$0.15 $0.85 $1.00
-
Adjusted diluted earnings per share(7), a non-GAAP measure, increased
$0.17 15.2% , to$1.29 $1.12
FULL YEAR 2023 FINANCIAL HIGHLIGHTS AND 2024 GUIDANCE
-
Total revenues increased
$229.6 million 20.3% , to$1.36 billion $1.13 billion
-
Revenues within all segments increased; led by Healthcare, the company's largest segment, which increased
26.0% to$674.0 million $535.0 million
-
Net income was
$62.5 million $75.6 million $19.4 million $19.8 million
-
Adjusted EBITDA(7), a non-GAAP measure, increased
$36.5 million 27.9% , to$167.3 million $130.8 million
-
Adjusted EBITDA as a percentage of revenues(7), a non-GAAP measure, increased 70 basis points to
12.3% for 2023 from11.6% for 2022.
-
Diluted earnings per share was
$3.19 $3.64 $0.99 $0.96
-
Adjusted diluted earnings per share(7), a non-GAAP measure, increased
$1.48 43.1% , to$4.91 $3.43
-
Net cash provided by operating activities increased
$49.9 million 58.4% , to$135.3 million $85.4 million
-
Huron returned
$123.6 million
-
Huron provides full year 2024 guidance, including revenue expectations in a range of
$1.46 billion $1.54 billion
OTHER HIGHLIGHTS
-
Huron amended its credit facility to include a
$275 million
- Huron released its 2023 Corporate Social Responsibility Report, which reiterates the company's commitment to shaping a more sustainable future.
- Huron was named a “Best Place to Work” by Glassdoor, one of the world's largest and most influential communities for workplace conversations. Huron secured the 32nd position out of 100 on Glassdoor’s Best Places to Work US Large list, including a 4.5 rating.
- Huron was named a “Best Place to Work for LGBTQ Equality” by the Human Rights Campaign (HRC) Foundation. Huron scored a perfect 100 on the HRC Foundation’s 2023-2024 Corporate Equality Index (CEI), which evaluates employers on corporate policies, culture and social responsibility initiatives, equal employment opportunities and benefits.
(1) In 2019, the Company invested
“Driven by strong growth across all three operating segments, we achieved record revenues and expanded our operating margins for the third consecutive year. Our fourth quarter performance was consistent with our expectations, culminating in record financial performance for the full year 2023,” said Mark Hussey, chief executive officer and president of Huron. “These results are only possible because of our incredibly talented team and their commitment to making a lasting impact on our clients and our business, while supporting one another in our highly collaborative culture.”
“Our financial performance demonstrates the foundation we have established to continue delivering on our medium-term investor objectives. Our deep industry expertise and leading market positions in healthcare and education, our expanding presence in commercial industries, and our rapidly growing portfolio of digital capabilities position us well to fulfill ongoing market demand and to meet or exceed our medium-term financial objectives for low double-digit revenue growth, increased profitability margins, and higher earnings per share,” added Hussey.
FOURTH QUARTER 2023 RESULTS
Revenues increased
Net income was
Fourth quarter 2023 earnings before interest, taxes, depreciation and amortization ("EBITDA")(7) was
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 December 31, |
||||||
|
2023 |
|
|
|
2022 |
|
|
Amortization of intangible assets |
$ |
2,017 |
|
|
$ |
2,702 |
|
Restructuring charges |
$ |
2,165 |
|
|
$ |
4,953 |
|
Other gains, net |
$ |
(242 |
) |
|
$ |
(159 |
) |
Transaction-related expenses |
$ |
55 |
|
|
$ |
— |
|
Unrealized loss on preferred stock investment |
$ |
26,262 |
|
|
$ |
— |
|
Tax effect of adjustments |
$ |
(8,018 |
) |
|
$ |
(1,986 |
) |
Foreign currency transaction losses (gains), net |
$ |
440 |
|
|
$ |
(246 |
) |
Adjusted EBITDA(7) increased
The number of revenue-generating professionals(2) increased
FULL YEAR 2023 RESULTS
Revenues increased
Net income was
EBITDA(7) for full year 2023 was
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):
Twelve Months Ended December 31, |
|||||||
|
|
2023 |
|
|
|
2022 |
|
Amortization of intangible assets |
$ |
8,219 |
|
|
$ |
11,198 |
|
Restructuring charges |
$ |
11,550 |
|
|
$ |
9,909 |
|
Other gains, net |
$ |
(444 |
) |
|
$ |
(193 |
) |
Transaction-related expenses |
$ |
357 |
|
|
$ |
50 |
|
Unrealized loss (gain) on preferred stock investment |
$ |
26,262 |
|
|
$ |
(26,964 |
) |
Tax effect of adjustments |
$ |
(12,175 |
) |
|
$ |
1,590 |
|
Foreign currency transaction losses (gains), net |
$ |
476 |
|
|
$ |
(655 |
) |
Adjusted EBITDA(7) increased
The number of revenue-generating professionals(2) increased
Additionally, in 2023, Huron repurchased 1,461,815 shares of the company's common stock for
OPERATING INDUSTRIES
The company’s year-to-date 2023 revenues by operating segment as a percentage of total company revenues are as follows: Healthcare (
OUTLOOK FOR 2024
Based on currently available information, the company provided guidance for full year 2024 revenues before reimbursable expenses to a range of
2024 TERM LOAN
On February 26, 2024, Huron amended its senior secured credit facility to include a
Additional details regarding the term loan are included in Huron’s Current Report on Form 8-K filed with the Securities and Exchange Commission. The Form 8-K is available on Huron’s website at http://ir.huronconsultinggroup.com.
FOURTH QUARTER 2023 WEBCAST
The company will host a webcast to discuss its financial results today, February 27, 2024, 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(7)
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
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, 2023 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 December 31, |
|
Twelve Months Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues and reimbursable expenses: |
|
|
|
|
|
|
|
||||||||
Revenues |
$ |
339,228 |
|
|
$ |
313,711 |
|
|
$ |
1,362,060 |
|
|
$ |
1,132,455 |
|
Reimbursable expenses |
|
10,777 |
|
|
|
7,472 |
|
|
|
36,695 |
|
|
|
26,506 |
|
Total revenues and reimbursable expenses |
|
350,005 |
|
|
|
321,183 |
|
|
|
1,398,755 |
|
|
|
1,158,961 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Direct costs (exclusive of depreciation and amortization included below) |
|
234,342 |
|
|
|
216,033 |
|
|
|
942,697 |
|
|
|
785,881 |
|
Reimbursable expenses |
|
10,524 |
|
|
|
7,422 |
|
|
|
36,766 |
|
|
|
26,671 |
|
Selling, general and administrative expenses |
|
66,833 |
|
|
|
60,495 |
|
|
|
257,488 |
|
|
|
209,381 |
|
Restructuring charges |
|
2,165 |
|
|
|
4,953 |
|
|
|
11,550 |
|
|
|
9,909 |
|
Depreciation and amortization |
|
6,285 |
|
|
|
6,781 |
|
|
|
24,906 |
|
|
|
27,359 |
|
Total operating expenses |
|
320,149 |
|
|
|
295,684 |
|
|
|
1,273,407 |
|
|
|
1,059,201 |
|
Operating income |
|
29,856 |
|
|
|
25,499 |
|
|
|
125,348 |
|
|
|
99,760 |
|
Other income (expense), net: |
|
|
|
|
|
|
|
||||||||
Interest expense, net of interest income |
|
(4,427 |
) |
|
|
(4,130 |
) |
|
|
(19,573 |
) |
|
|
(11,883 |
) |
Other income (expense), net |
|
(23,661 |
) |
|
|
2,001 |
|
|
|
(21,880 |
) |
|
|
20,700 |
|
Total other income (expense), net |
|
(28,088 |
) |
|
|
(2,129 |
) |
|
|
(41,453 |
) |
|
|
8,817 |
|
Income before taxes |
|
1,768 |
|
|
|
23,370 |
|
|
|
83,895 |
|
|
|
108,577 |
|
Income tax expense |
|
(1,064 |
) |
|
|
6,286 |
|
|
|
21,416 |
|
|
|
33,025 |
|
Net income |
$ |
2,832 |
|
|
$ |
17,084 |
|
|
$ |
62,479 |
|
|
$ |
75,552 |
|
Earnings per share: |
|
|
|
|
|
|
|
||||||||
Net income per basic share |
$ |
0.15 |
|
|
$ |
0.88 |
|
|
$ |
3.32 |
|
|
$ |
3.73 |
|
Net income per diluted share |
$ |
0.15 |
|
|
$ |
0.85 |
|
|
$ |
3.19 |
|
|
$ |
3.64 |
|
Weighted average shares used in calculating earnings per share: |
|
|
|
|
|
|
|
||||||||
Basic |
|
18,510 |
|
|
|
19,470 |
|
|
|
18,832 |
|
|
|
20,249 |
|
Diluted |
|
19,389 |
|
|
|
20,159 |
|
|
|
19,601 |
|
|
|
20,746 |
|
Comprehensive income (loss): |
|
|
|
|
|
|
|
||||||||
Net income |
$ |
2,832 |
|
|
$ |
17,084 |
|
|
$ |
62,479 |
|
|
$ |
75,552 |
|
Foreign currency translation adjustments, net of tax |
|
795 |
|
|
|
(157 |
) |
|
|
512 |
|
|
|
(1,890 |
) |
Unrealized gain (loss) on investment, net of tax |
|
4,735 |
|
|
|
(3,428 |
) |
|
|
7,811 |
|
|
|
(6,146 |
) |
Unrealized gain (loss) on cash flow hedging instruments, net of tax |
|
(3,381 |
) |
|
|
257 |
|
|
|
(3,615 |
) |
|
|
9,315 |
|
Other comprehensive income (loss) |
|
2,149 |
|
|
|
(3,328 |
) |
|
|
4,708 |
|
|
|
1,279 |
|
Comprehensive income |
$ |
4,981 |
|
|
$ |
13,756 |
|
|
$ |
67,187 |
|
|
$ |
76,831 |
|
HURON CONSULTING GROUP INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) (Unaudited) |
|||||||
|
December 31,
|
|
December 31,
|
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
12,149 |
|
|
$ |
11,834 |
|
Receivables from clients, net |
|
162,566 |
|
|
|
147,852 |
|
Unbilled services, net |
|
190,869 |
|
|
|
141,781 |
|
Income tax receivable |
|
6,385 |
|
|
|
960 |
|
Prepaid expenses and other current assets |
|
28,491 |
|
|
|
26,057 |
|
Total current assets |
|
400,460 |
|
|
|
328,484 |
|
Property and equipment, net |
|
23,728 |
|
|
|
26,107 |
|
Deferred income taxes, net |
|
2,288 |
|
|
|
1,554 |
|
Long-term investments |
|
75,414 |
|
|
|
91,194 |
|
Operating lease right-of-use assets |
|
24,131 |
|
|
|
30,304 |
|
Other non-current assets |
|
92,336 |
|
|
|
73,039 |
|
Intangible assets, net |
|
18,074 |
|
|
|
23,392 |
|
Goodwill |
|
625,711 |
|
|
|
624,966 |
|
Total assets |
$ |
1,262,142 |
|
|
$ |
1,199,040 |
|
Liabilities and stockholders’ equity |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
10,074 |
|
|
$ |
14,254 |
|
Accrued expenses and other current liabilities |
|
33,087 |
|
|
|
27,268 |
|
Accrued payroll and related benefits |
|
225,921 |
|
|
|
171,723 |
|
Current maturities of operating lease liabilities |
|
11,032 |
|
|
|
10,530 |
|
Deferred revenues |
|
22,461 |
|
|
|
21,909 |
|
Total current liabilities |
|
302,575 |
|
|
|
245,684 |
|
Non-current liabilities: |
|
|
|
||||
Deferred compensation and other liabilities |
|
35,665 |
|
|
|
33,614 |
|
Long-term debt |
|
324,000 |
|
|
|
290,000 |
|
Operating lease liabilities, net of current portion |
|
38,850 |
|
|
|
45,556 |
|
Deferred income taxes, net |
|
28,160 |
|
|
|
32,146 |
|
Total non-current liabilities |
|
426,675 |
|
|
|
401,316 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ equity |
|
|
|
||||
Common stock; |
|
212 |
|
|
|
223 |
|
Treasury stock, at cost, 2,852,296 and 2,711,712 shares, respectively |
|
(142,136 |
) |
|
|
(137,556 |
) |
Additional paid-in capital |
|
236,962 |
|
|
|
318,706 |
|
Retained earnings |
|
415,027 |
|
|
|
352,548 |
|
Accumulated other comprehensive income |
|
22,827 |
|
|
|
18,119 |
|
Total stockholders’ equity |
|
532,892 |
|
|
|
552,040 |
|
Total liabilities and stockholders’ equity |
$ |
1,262,142 |
|
|
$ |
1,199,040 |
|
HURON CONSULTING GROUP INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
|||||||
Twelve Months Ended December 31, |
|||||||
|
|
2023 |
|
|
|
2022 |
|
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
62,479 |
|
|
$ |
75,552 |
|
Adjustments to reconcile net income to cash flows from operating activities: |
|
|
|
||||
Depreciation and amortization |
|
24,938 |
|
|
|
27,359 |
|
Non-cash lease expense |
|
6,321 |
|
|
|
6,369 |
|
Lease-related impairment charges |
|
6,248 |
|
|
|
211 |
|
Share-based compensation |
|
45,697 |
|
|
|
30,971 |
|
Amortization of debt discount and issuance costs |
|
769 |
|
|
|
1,169 |
|
Allowances for doubtful accounts |
|
421 |
|
|
|
141 |
|
Deferred income taxes |
|
(6,182 |
) |
|
|
18,784 |
|
Gain on sale of property and equipment, excluding transaction costs |
|
(64 |
) |
|
|
(1,111 |
) |
Change in fair value of contingent consideration liabilities |
|
(490 |
) |
|
|
(359 |
) |
Change in fair value of preferred stock investment |
|
26,262 |
|
|
|
(26,964 |
) |
Other, net |
|
— |
|
|
|
6 |
|
Changes in operating assets and liabilities, net of acquisitions and divestiture: |
|
|
|
||||
(Increase) decrease in receivables from clients, net |
|
(15,046 |
) |
|
|
(25,847 |
) |
(Increase) decrease in unbilled services, net |
|
(49,051 |
) |
|
|
(51,359 |
) |
(Increase) decrease in current income tax receivable / payable, net |
|
(5,139 |
) |
|
|
7,673 |
|
(Increase) decrease in other assets |
|
(6,535 |
) |
|
|
2,532 |
|
Increase (decrease) in accounts payable and other liabilities |
|
(6,948 |
) |
|
|
(13,466 |
) |
Increase (decrease) in accrued payroll and related benefits |
|
51,022 |
|
|
|
32,770 |
|
Increase (decrease) in deferred revenues |
|
560 |
|
|
|
969 |
|
Net cash provided by operating activities |
|
135,262 |
|
|
|
85,400 |
|
Cash flows from investing activities: |
|
|
|
||||
Purchases of property and equipment |
|
(9,444 |
) |
|
|
(12,547 |
) |
Investment in life insurance policies |
|
(3,074 |
) |
|
|
(872 |
) |
Distributions from life insurance policies |
|
2,956 |
|
|
|
3,377 |
|
Purchases of businesses |
|
(1,613 |
) |
|
|
(3,448 |
) |
Capitalization of internally developed software costs |
|
(25,742 |
) |
|
|
(11,752 |
) |
Proceeds from note receivable |
|
154 |
|
|
|
154 |
|
Proceeds from sale of property and equipment |
|
111 |
|
|
|
4,753 |
|
Divestiture of business |
|
— |
|
|
|
207 |
|
Net cash used in investing activities |
|
(36,652 |
) |
|
|
(20,128 |
) |
Cash flows from financing activities: |
|
|
|
||||
Proceeds from exercises of stock options |
|
2,524 |
|
|
|
1,421 |
|
Shares redeemed for employee tax withholdings |
|
(10,536 |
) |
|
|
(7,795 |
) |
Share repurchases |
|
(122,757 |
) |
|
|
(120,393 |
) |
Proceeds from bank borrowings |
|
354,000 |
|
|
|
314,000 |
|
Repayments of bank borrowings |
|
(320,000 |
) |
|
|
(256,780 |
) |
Payments for debt issuance costs |
|
(58 |
) |
|
|
(2,686 |
) |
Deferred payments on business acquisition |
|
(1,500 |
) |
|
|
(1,875 |
) |
Net cash used in financing activities |
|
(98,327 |
) |
|
|
(74,108 |
) |
Effect of exchange rate changes on cash |
|
32 |
|
|
|
(111 |
) |
Net increase (decrease) in cash and cash equivalents |
|
315 |
|
|
|
(8,947 |
) |
Cash and cash equivalents at beginning of the period |
|
11,834 |
|
|
|
20,781 |
|
Cash and cash equivalents at end of the period |
$ |
12,149 |
|
|
$ |
11,834 |
|
HURON CONSULTING GROUP INC. SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (Unaudited) |
||||||||||||||||||||||
|
|
Three Months Ended December 31, |
|
Percent Increase (Decrease) |
|
Twelve Months Ended December 31, |
|
Percent Increase (Decrease) |
||||||||||||||
Segment and Consolidated Operating Results (in thousands): |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
||||
Healthcare: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues |
|
$ |
171,995 |
|
|
$ |
153,330 |
|
|
12.2 |
% |
|
$ |
673,989 |
|
|
$ |
534,999 |
|
|
26.0 |
% |
Operating income |
|
$ |
44,606 |
|
|
$ |
39,786 |
|
|
12.1 |
% |
|
$ |
172,900 |
|
|
$ |
131,227 |
|
|
31.8 |
% |
Segment operating margin |
|
|
25.9 |
% |
|
|
25.9 |
% |
|
|
|
|
25.7 |
% |
|
|
24.5 |
% |
|
|
||
Education: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues |
|
$ |
103,779 |
|
|
$ |
96,601 |
|
|
7.4 |
% |
|
$ |
429,663 |
|
|
$ |
359,835 |
|
|
19.4 |
% |
Operating income |
|
$ |
21,986 |
|
|
$ |
20,076 |
|
|
9.5 |
% |
|
$ |
99,098 |
|
|
$ |
78,924 |
|
|
25.6 |
% |
Segment operating margin |
|
|
21.2 |
% |
|
|
20.8 |
% |
|
|
|
|
23.1 |
% |
|
|
21.9 |
% |
|
|
||
Commercial: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues |
|
$ |
63,454 |
|
|
$ |
63,780 |
|
|
(0.5 |
)% |
|
$ |
258,408 |
|
|
$ |
237,621 |
|
|
8.7 |
% |
Operating income |
|
$ |
14,231 |
|
|
$ |
11,743 |
|
|
21.2 |
% |
|
$ |
54,202 |
|
|
$ |
50,025 |
|
|
8.3 |
% |
Segment operating margin |
|
|
22.4 |
% |
|
|
18.4 |
% |
|
|
|
|
21.0 |
% |
|
|
21.1 |
% |
|
|
||
Total Huron: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues |
|
$ |
339,228 |
|
|
$ |
313,711 |
|
|
8.1 |
% |
|
$ |
1,362,060 |
|
|
$ |
1,132,455 |
|
|
20.3 |
% |
Reimbursable expenses |
|
|
10,777 |
|
|
|
7,472 |
|
|
44.2 |
% |
|
|
36,695 |
|
|
|
26,506 |
|
|
38.4 |
% |
Total revenues and reimbursable expenses |
|
$ |
350,005 |
|
|
$ |
321,183 |
|
|
9.0 |
% |
|
$ |
1,398,755 |
|
|
$ |
1,158,961 |
|
|
20.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment operating income |
|
$ |
80,823 |
|
|
$ |
71,605 |
|
|
12.9 |
% |
|
$ |
326,200 |
|
|
$ |
260,176 |
|
|
25.4 |
% |
Items not allocated at the segment level: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other operating expenses |
|
|
45,199 |
|
|
|
40,083 |
|
|
12.8 |
% |
|
|
174,762 |
|
|
|
136,459 |
|
|
28.1 |
% |
Restructuring charges |
|
|
1,323 |
|
|
|
923 |
|
|
43.3 |
% |
|
|
8,204 |
|
|
|
3,686 |
|
|
122.6 |
% |
Depreciation and amortization |
|
|
4,445 |
|
|
|
5,100 |
|
|
(12.8 |
)% |
|
|
17,886 |
|
|
|
20,271 |
|
|
(11.8 |
)% |
Total operating income |
|
|
29,856 |
|
|
|
25,499 |
|
|
17.1 |
% |
|
|
125,348 |
|
|
|
99,760 |
|
|
25.6 |
% |
Other income (expense), net |
|
|
(28,088 |
) |
|
|
(2,129 |
) |
|
N/M |
|
|
|
(41,453 |
) |
|
|
8,817 |
|
|
N/M |
|
Income before taxes |
|
$ |
1,768 |
|
|
$ |
23,370 |
|
|
(92.4 |
)% |
|
$ |
83,895 |
|
|
$ |
108,577 |
|
|
(22.7 |
)% |
Other Operating Data: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of revenue-generating professionals by segment (at period end) (2): |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Healthcare |
|
|
2,270 |
|
|
|
1,890 |
|
|
20.1 |
% |
|
|
2,270 |
|
|
|
1,890 |
|
|
20.1 |
% |
Education |
|
|
1,788 |
|
|
|
1,579 |
|
|
13.2 |
% |
|
|
1,788 |
|
|
|
1,579 |
|
|
13.2 |
% |
Commercial (3) |
|
|
1,461 |
|
|
|
1,363 |
|
|
7.2 |
% |
|
|
1,461 |
|
|
|
1,363 |
|
|
7.2 |
% |
Total |
|
|
5,519 |
|
|
|
4,832 |
|
|
14.2 |
% |
|
|
5,519 |
|
|
|
4,832 |
|
|
14.2 |
% |
Revenue by capability: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consulting and Managed Services (4) |
|
$ |
192,883 |
|
|
$ |
183,638 |
|
|
5.0 |
% |
|
$ |
782,020 |
|
|
$ |
637,994 |
|
|
22.6 |
% |
Digital |
|
|
146,345 |
|
|
|
130,073 |
|
|
12.5 |
% |
|
|
580,040 |
|
|
|
494,461 |
|
|
17.3 |
% |
Total |
|
$ |
339,228 |
|
|
$ |
313,711 |
|
|
8.1 |
% |
|
$ |
1,362,060 |
|
|
$ |
1,132,455 |
|
|
20.3 |
% |
Number of revenue-generating professionals by capability (at period end)(2): |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consulting and Managed Services (5) |
|
|
2,648 |
|
|
|
2,294 |
|
|
15.4 |
% |
|
|
2,648 |
|
|
|
2,294 |
|
|
15.4 |
% |
Digital |
|
|
2,871 |
|
|
|
2,538 |
|
|
13.1 |
% |
|
|
2,871 |
|
|
|
2,538 |
|
|
13.1 |
% |
Total |
|
|
5,519 |
|
|
|
4,832 |
|
|
14.2 |
% |
|
|
5,519 |
|
|
|
4,832 |
|
|
14.2 |
% |
Utilization rate by capability (6): |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Consulting |
|
|
76.8 |
% |
|
|
80.6 |
% |
|
|
|
|
76.6 |
% |
|
|
75.2 |
% |
|
|
||
Digital |
|
|
80.5 |
% |
|
|
69.4 |
% |
|
|
|
|
75.3 |
% |
|
|
71.0 |
% |
|
|
||
| ____________________ | ||
|
|
|
(2) |
|
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. |
|
|
|
(3) |
|
The majority of our revenue-generating professionals within our Commercial segment can provide services across all of our industries, including healthcare and education. |
|
|
|
(4) |
|
Managed Services capability revenues within our Healthcare segment was |
|
|
|
|
|
Managed Services capability revenues within our Education segment was |
|
|
|
(5) |
|
The number of Managed Services revenue-generating professionals within our Healthcare segment was 924 and 715 as of December 31, 2023 and 2022, respectively. |
|
|
|
|
|
The number of Managed Services revenue-generating professionals within our Education segment was 103 and 106 as of December 31, 2023 and 2022, respectively. |
|
|
|
(6) |
|
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 |
HURON CONSULTING GROUP INC. RECONCILIATION OF NET INCOME TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (7) (In thousands) (Unaudited) |
|||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues |
$ |
339,228 |
|
|
$ |
313,711 |
|
|
$ |
1,362,060 |
|
|
$ |
1,132,455 |
|
Net income |
$ |
2,832 |
|
|
$ |
17,084 |
|
|
$ |
62,479 |
|
|
$ |
75,552 |
|
Add back: |
|
|
|
|
|
|
|
||||||||
Income tax expense (benefit) |
|
(1,064 |
) |
|
|
6,286 |
|
|
|
21,416 |
|
|
|
33,025 |
|
Interest expense, net of interest income |
|
4,427 |
|
|
|
4,130 |
|
|
|
19,573 |
|
|
|
11,883 |
|
Depreciation and amortization |
|
6,489 |
|
|
|
6,995 |
|
|
|
25,672 |
|
|
|
28,233 |
|
Earnings before interest, taxes, depreciation and amortization (EBITDA) (7) |
|
12,684 |
|
|
|
34,495 |
|
|
|
129,140 |
|
|
|
148,693 |
|
Add back: |
|
|
|
|
|
|
|
||||||||
Restructuring charges |
|
2,165 |
|
|
|
4,953 |
|
|
|
11,550 |
|
|
|
9,909 |
|
Other gains, net |
|
(242 |
) |
|
|
(159 |
) |
|
|
(444 |
) |
|
|
(193 |
) |
Transaction-related expenses |
|
55 |
|
|
|
— |
|
|
|
357 |
|
|
|
50 |
|
Unrealized loss (gain) on preferred stock investment |
|
26,262 |
|
|
|
— |
|
|
|
26,262 |
|
|
|
(26,964 |
) |
Foreign currency transaction losses (gains), net |
|
440 |
|
|
|
(246 |
) |
|
|
476 |
|
|
|
(655 |
) |
Adjusted EBITDA (7) |
$ |
41,364 |
|
|
$ |
39,043 |
|
|
$ |
167,341 |
|
|
$ |
130,840 |
|
Adjusted EBITDA as a percentage of revenues (7) |
|
12.2 |
% |
|
|
12.4 |
% |
|
|
12.3 |
% |
|
|
11.6 |
% |
HURON CONSULTING GROUP INC. RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (7) (In thousands, except per share amounts) (Unaudited) |
|||||||||||||||
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income |
$ |
2,832 |
|
|
$ |
17,084 |
|
|
$ |
62,479 |
|
|
$ |
75,552 |
|
Weighted average shares - diluted |
|
19,389 |
|
|
|
20,159 |
|
|
|
19,601 |
|
|
|
20,746 |
|
Diluted earnings per share |
$ |
0.15 |
|
|
$ |
0.85 |
|
|
$ |
3.19 |
|
|
$ |
3.64 |
|
Add back: |
|
|
|
|
|
|
|
||||||||
Amortization of intangible assets |
|
2,017 |
|
|
|
2,702 |
|
|
|
8,219 |
|
|
|
11,198 |
|
Restructuring charges |
|
2,165 |
|
|
|
4,953 |
|
|
|
11,550 |
|
|
|
9,909 |
|
Other gains, net |
|
(242 |
) |
|
|
(159 |
) |
|
|
(444 |
) |
|
|
(193 |
) |
Transaction-related expenses |
|
55 |
|
|
|
— |
|
|
|
357 |
|
|
|
50 |
|
Unrealized loss (gain) on preferred stock investment |
|
26,262 |
|
|
|
— |
|
|
|
26,262 |
|
|
|
(26,964 |
) |
Tax effect of adjustments |
|
(8,018 |
) |
|
|
(1,986 |
) |
|
|
(12,175 |
) |
|
|
1,590 |
|
Total adjustments, net of tax |
|
22,239 |
|
|
|
5,510 |
|
|
|
33,769 |
|
|
|
(4,410 |
) |
Adjusted net income (7) |
$ |
25,071 |
|
|
$ |
22,594 |
|
|
$ |
96,248 |
|
|
$ |
71,142 |
|
Adjusted weighted average shares - diluted |
|
19,389 |
|
|
|
20,159 |
|
|
|
19,601 |
|
|
|
20,746 |
|
Adjusted diluted earnings per share (7) |
$ |
1.29 |
|
|
$ |
1.12 |
|
|
$ |
4.91 |
|
|
$ |
3.43 |
|
(7) |
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 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240227454000/en/
MEDIA CONTACT
Allie Bovis
abovis@hcg.com
INVESTOR CONTACT
John D. Kelly
investor@hcg.com
Source: Huron
FAQ
What was Huron's total revenue increase in Q4 2023?
What was Huron's net income in Q4 2023?
How did adjusted EBITDA change in Q4 2023?
What was Huron's diluted earnings per share in Q4 2023?
What was the percentage increase in total revenues for full year 2023 compared to 2022?
What was Huron's adjusted EBITDA for full year 2023?
How many shares of common stock did Huron repurchase in 2023?
What is Huron's revenue expectation range for full year 2024?
What change did Huron make to its credit facility recently?
What recognition did Huron receive from Glassdoor and the HRC Foundation in 2023?
