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Huron Announces First Quarter 2022 Financial Results and Updates 2022 Guidance

FIRST QUARTER 2022 HIGHLIGHTS AND GUIDANCE

  • Revenues increased $56.8 million, or 28.0%, to $260.0 million in Q1 2022 from $203.2 million in Q1 2021.
  • Net income increased $21.4 million to $26.9 million in Q1 2022 from $5.4 million in Q1 2021. Results for Q1 2022 include an unrealized gain of $19.8 million, net of tax, on the company's investment in a hospital-at-home company.
  • Adjusted EBITDA(7), a non-GAAP measure, increased $5.7 million, or 34.4%, to $22.1 million in Q1 2022 from $16.5 million in Q1 2021.
  • Diluted earnings per share increased $1.03 to $1.27 in Q1 2022 from $0.24 in Q1 2021.
  • Adjusted diluted earnings per share(7), a non-GAAP measure that excludes the unrealized gain on the company's investment in a hospital-at-home company, increased $0.14, or 40.0%, to $0.49 in Q1 2022 from $0.35 in Q1 2021.
  • Huron updates its previous earnings guidance range for full year 2022, including revenue expectations in a range of $1.00 billion to $1.05 billion.

Global professional services firm Huron (NASDAQ: HURN) today announced financial results for the first quarter ended March 31, 2022.

“Our strong first quarter results reflect the continued momentum that started in early 2021 and resulted in growth in all three of our operating segments,” said James H. Roth, chief executive officer of Huron. “Revenues grew 28% over the prior year quarter, reflective of the significant growth opportunities in each of our core industries.”

“Demand for our healthcare and education industry offerings and our digital, strategy and financial advisory capabilities remains strong, enabling us to increase our annual revenue and earnings guidance. Market conditions remain favorable for our core offerings, and we believe that we will continue to achieve strong results consistent with the outlook we described in our recent Investor Day presentation,” added Roth.

FIRST QUARTER 2022 RESULTS

Revenues increased $56.8 million, or 28.0%, to $260.0 million for the first quarter of 2022, compared to $203.2 million for the first quarter of 2021.

Net income increased $21.4 million to $26.9 million for the first quarter of 2022, compared to $5.4 million for the same quarter last year. Diluted earnings per share increased $1.03 to $1.27 for the first quarter of 2022, compared to $0.24 for the first quarter of 2021. Results for the first quarter of 2022 include an unrealized gain of $19.8 million, net of tax, related to the increase in fair value of the company's investment in a hospital-at-home company.

First quarter 2022 earnings before interest, taxes, depreciation and amortization ("EBITDA")(7) increased $32.2 million to $47.4 million, compared $15.2 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

March 31,

 

2022

 

2021

Amortization of intangible assets

$

2,860

 

 

$

2,399

 

Restructuring and other charges

$

1,555

 

 

$

628

 

Other losses

$

12

 

 

$

42

 

Transaction-related expenses

$

50

 

 

$

170

 

Unrealized gain on preferred stock investment

$

(26,964

)

 

$

 

Tax effect of adjustments

$

5,959

 

 

$

(858

)

Foreign currency transaction losses, net

$

19

 

 

$

403

 

Adjusted EBITDA(7) increased $5.7 million, or 34.4%, to $22.1 million, or 8.5% of revenues, in the first quarter of 2022, compared to $16.5 million, or 8.1% of revenues, in the same quarter last year. Adjusted net income(7) increased $2.5 million to $10.3 million, or $0.49 per diluted share, for the first quarter of 2022, compared to $7.8 million, or $0.35 per diluted share, for the same quarter in 2021.

The number of revenue-generating professionals(1) increased 29.1% to 4,023 in the first quarter of 2022 from 3,116 in the same quarter last year. The utilization rate(5) of the company's Consulting capability increased to 71.4% during the first quarter 2022, compared to 66.4% during the same period last year. The utilization rate(5) for the company's Digital capability increased to 72.4% during the first quarter 2022, compared to 71.3% during the same period last year.

OPERATING INDUSTRIES

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

The company’s first quarter 2022 revenues by operating segment as a percentage of total company revenues are as follows: Healthcare (47%); Education (31%); and Commercial (22%). 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 March 31, 2022.

OUTLOOK FOR 2022

Based on currently available information, the company increased guidance for full year 2022 revenues before reimbursable expenses to a range of $1.00 billion to $1.05 billion. The company anticipates adjusted EBITDA as a percentage of revenues in a range of 11.25% to 12.25% and non-GAAP adjusted diluted earnings per share in a range of $3.00 to $3.40.

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

FIRST QUARTER 2022 WEBCAST

The company will host a webcast to discuss its financial results today, May 3, 2022, at 5:00 p.m. Eastern Time, 4:00 p.m. Central Time. The conference call is being webcast by NASDAQ 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 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: the impact of the COVID-19 pandemic on the economy, our clients and client demand for our services, and our ability to sell and provide services, including the measures taken by governmental authorities and businesses in response to the pandemic, which may cause or contribute to other risks and uncertainties that we face; failure to achieve expected utilization rates, billing rates and the 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, 2021 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

March 31,

 

2022

 

2021

Revenues and reimbursable expenses:

 

 

 

Revenues

$

260,049

 

 

$

203,213

 

Reimbursable expenses

 

4,726

 

 

 

1,934

 

Total revenues and reimbursable expenses

 

264,775

 

 

 

205,147

 

Operating expenses:

 

 

 

Direct costs (exclusive of depreciation and amortization included below)

 

187,247

 

 

 

148,115

 

Reimbursable expenses

 

4,756

 

 

 

2,003

 

Selling, general and administrative expenses

 

48,395

 

 

 

39,808

 

Restructuring charges

 

1,555

 

 

 

628

 

Depreciation and amortization

 

6,864

 

 

 

6,353

 

Total operating expenses

 

248,817

 

 

 

196,907

 

Operating income

 

15,958

 

 

 

8,240

 

Other income (expense), net:

 

 

 

Interest expense, net of interest income

 

(2,196

)

 

 

(1,719

)

Other income, net

 

24,365

 

 

 

420

 

Total other income (expense), net

 

22,169

 

 

 

(1,299

)

Income before taxes

 

38,127

 

 

 

6,941

 

Income tax expense

 

11,275

 

 

 

1,536

 

Net income

$

26,852

 

 

$

5,405

 

Earnings per share:

 

 

 

Net income per basic share

$

1.29

 

 

$

0.25

 

Net income per diluted share

$

1.27

 

 

$

0.24

 

Weighted average shares used in calculating earnings per share:

 

 

 

Basic

 

20,850

 

 

 

21,932

 

Diluted

 

21,167

 

 

 

22,341

 

Comprehensive income (loss):

 

 

 

Net income

$

26,852

 

 

$

5,405

 

Foreign currency translation adjustments, net of tax

 

(43

)

 

 

400

 

Unrealized loss on investment, net of tax

 

(2,661

)

 

 

(4,648

)

Unrealized gain on cash flow hedging instruments, net of tax

 

4,325

 

 

 

1,429

 

Other comprehensive income (loss)

 

1,621

 

 

 

(2,819

)

Comprehensive income

$

28,473

 

 

$

2,586

 

 

HURON CONSULTING GROUP INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)

 

 

March 31,

2022

 

December 31,

2021

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

9,748

 

 

$

20,781

 

Receivables from clients, net

 

116,527

 

 

 

122,316

 

Unbilled services, net

 

125,791

 

 

 

91,285

 

Income tax receivable

 

4,997

 

 

 

8,071

 

Prepaid expenses and other current assets

 

17,134

 

 

 

15,229

 

Total current assets

 

274,197

 

 

 

257,682

 

Property and equipment, net

 

26,836

 

 

 

31,004

 

Deferred income taxes, net

 

1,791

 

 

 

1,804

 

Long-term investments

 

95,930

 

 

 

72,584

 

Operating lease right-of-use assets

 

33,737

 

 

 

35,311

 

Other non-current assets

 

69,764

 

 

 

68,191

 

Intangible assets, net

 

31,089

 

 

 

31,894

 

Goodwill

 

623,841

 

 

 

620,879

 

Total assets

$

1,157,185

 

 

$

1,119,349

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

12,364

 

 

$

13,621

 

Accrued expenses and other current liabilities

 

19,470

 

 

 

22,519

 

Accrued payroll and related benefits

 

64,169

 

 

 

139,131

 

Current maturities of long-term debt

 

 

 

 

559

 

Current maturities of operating lease liabilities

 

10,213

 

 

 

10,142

 

Deferred revenues

 

21,632

 

 

 

19,212

 

Total current liabilities

 

127,848

 

 

 

205,184

 

Non-current liabilities:

 

 

 

Deferred compensation and other liabilities

 

40,296

 

 

 

43,458

 

Long-term debt, net of current portion

 

335,000

 

 

 

232,221

 

Operating lease liabilities, net of current portion

 

51,756

 

 

 

54,313

 

Deferred income taxes, net

 

20,003

 

 

 

12,273

 

Total non-current liabilities

 

447,055

 

 

 

342,265

 

Commitments and contingencies

 

 

 

Stockholders’ equity

 

 

 

Common stock; $0.01 par value; 500,000,000 shares authorized; 23,976,090 and 24,364,814 shares issued, respectively

 

237

 

 

 

239

 

Treasury stock, at cost, 2,645,999 and 2,495,172 shares, respectively

 

(135,367

)

 

 

(135,969

)

Additional paid-in capital

 

395,103

 

 

 

413,794

 

Retained earnings

 

303,848

 

 

 

276,996

 

Accumulated other comprehensive income

 

18,461

 

 

 

16,840

 

Total stockholders’ equity

 

582,282

 

 

 

571,900

 

Total liabilities and stockholders’ equity

$

1,157,185

 

 

$

1,119,349

 

 

HURON CONSULTING GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

Three Months Ended

March 31,

 

2022

 

2021

Cash flows from operating activities:

 

 

 

Net income

$

26,852

 

 

$

5,405

 

Adjustments to reconcile net income to cash flows from operating activities:

 

 

 

Depreciation and amortization

 

6,864

 

 

 

6,567

 

Non-cash lease expense

 

1,640

 

 

 

1,693

 

Share-based compensation

 

7,935

 

 

 

5,625

 

Amortization of debt discount and issuance costs

 

198

 

 

 

198

 

Allowances for doubtful accounts

 

28

 

 

 

 

Deferred income taxes

 

7,129

 

 

 

 

Gain on sale of property and equipment, excluding transaction costs

 

(1,067

)

 

 

 

Change in fair value of contingent consideration liabilities

 

12

 

 

 

42

 

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

 

5,791

 

 

 

1,178

 

(Increase) decrease in unbilled services, net

 

(35,239

)

 

 

(23,086

)

(Increase) decrease in current income tax receivable / payable, net

 

3,266

 

 

 

573

 

(Increase) decrease in other assets

 

1,361

 

 

 

327

 

Increase (decrease) in accounts payable and other liabilities

 

(7,044

)

 

 

2,566

 

Increase (decrease) in accrued payroll and related benefits

 

(70,689

)

 

 

(74,273

)

Increase (decrease) in deferred revenues

 

828

 

 

 

(9,569

)

Net cash used in operating activities

 

(79,099

)

 

 

(82,754

)

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

 

(3,924

)

 

 

(637

)

Purchases of businesses, net of cash acquired

 

(2,289

)

 

 

(6,000

)

Capitalization of internally developed software costs

 

(2,060

)

 

 

(1,400

)

Proceeds from sale of property and equipment

 

4,750

 

 

 

 

Divestiture of business

 

207

 

 

 

 

Net cash used in investing activities

 

(3,316

)

 

 

(8,037

)

Cash flows from financing activities:

 

 

 

Proceeds from exercise of stock options

 

648

 

 

 

174

 

Shares redeemed for employee tax withholdings

 

(6,884

)

 

 

(8,503

)

Share repurchases

 

(24,097

)

 

 

(11,454

)

Proceeds from bank borrowings

 

150,000

 

 

 

89,000

 

Repayments of bank borrowings

 

(47,780

)

 

 

(24,135

)

Deferred payment on business acquisition

 

(500

)

 

 

 

Net cash used in financing activities

 

71,387

 

 

 

45,082

 

Effect of exchange rate changes on cash

 

(5

)

 

 

155

 

Net decrease in cash and cash equivalents

 

(11,033

)

 

 

(45,554

)

Cash and cash equivalents at beginning of the period

 

20,781

 

 

 

67,177

 

Cash and cash equivalents at end of the period

$

9,748

 

 

$

21,623

 

 

HURON CONSULTING GROUP INC.

SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA

(Unaudited)

 

 

 

Three Months Ended

March 31,

 

Percent

Increase

(Decrease)

Segment and Consolidated Operating Results (in thousands):

 

2022

 

2021

 

Healthcare:

 

 

 

 

 

 

Revenues

 

$

121,876

 

 

$

95,975

 

 

27.0

%

Operating income

 

$

28,032

 

 

$

23,827

 

 

17.6

%

Segment operating income as a percentage of segment revenues

 

 

23.0

%

 

 

24.8

%

 

 

Education:

 

 

 

 

 

 

Revenues

 

$

80,662

 

 

$

51,342

 

 

57.1

%

Operating income

 

$

14,306

 

 

$

8,537

 

 

67.6

%

Segment operating income as a percentage of segment revenues

 

 

17.7

%

 

 

16.6

%

 

 

Commercial:

 

 

 

 

 

 

Revenues

 

$

57,511

 

 

$

55,896

 

 

2.9

%

Operating income

 

$

12,214

 

 

$

9,850

 

 

24.0

%

Segment operating income as a percentage of segment revenues

 

 

21.2

%

 

 

17.6

%

 

 

Total Huron:

 

 

 

 

 

 

Revenues

 

$

260,049

 

 

$

203,213

 

 

28.0

%

Reimbursable expenses

 

 

4,726

 

 

 

1,934

 

 

144.4

%

Total revenues and reimbursable expenses

 

$

264,775

 

 

$

205,147

 

 

29.1

%

 

 

 

 

 

 

 

Segment operating income

 

$

54,552

 

 

$

42,214

 

 

29.2

%

Items not allocated at the segment level:

 

 

 

 

 

 

Other operating expenses

 

 

33,548

 

 

 

28,879

 

 

16.2

%

Depreciation and amortization

 

 

5,046

 

 

 

5,095

 

 

(1.0

) %

Total operating income

 

 

15,958

 

 

 

8,240

 

 

93.7

%

Other income (expense), net

 

 

22,169

 

 

 

(1,299

)

 

N/M

 

Income before taxes

 

$

38,127

 

 

$

6,941

 

 

N/M

 

Other Operating Data:

 

 

 

 

 

 

Number of revenue-generating professionals by segment (at period end)(1)(6):

 

 

 

 

 

 

Healthcare

 

 

1,647

 

 

 

1,130

 

 

 

Education

 

 

1,231

 

 

 

871

 

 

 

Commercial (2)

 

 

1,145

 

 

 

1,115

 

 

 

Total

 

 

4,023

 

 

 

3,116

 

 

 

 

Revenue by capability:

 

 

 

 

 

 

Consulting and Managed Services (3)

 

$

150,584

 

 

$

122,551

 

 

 

Digital

 

 

109,465

 

 

 

80,662

 

 

 

Total

 

$

260,049

 

 

$

203,213

 

 

 

Number of revenue-generating professionals by capability (at period end)(1):

 

 

 

 

 

 

Consulting and Managed Services (4)

 

 

2,003

 

 

 

1,376

 

 

 

Digital

 

 

2,020

 

 

 

1,740

 

 

 

Total

 

 

4,023

 

 

 

3,116

 

 

 

Utilization rate by capability(5):

 

 

 

 

 

 

Consulting

 

 

71.4

%

 

 

66.4

%

 

 

Digital

 

 

72.4

%

 

 

71.3

%

 

 

(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 revenue within our Healthcare segment for the three months ended March 31, 2022 and March 31, 2021 was $13.8 million and $7.7 million, respectively.

 

 

Managed Services capability revenue within our Education segment for the three months ended March 31, 2022 and March 31, 2021 was $3.4 million and $2.2 million, respectively.

 

(4)

The number of Managed Services revenue-generating professionals within our Healthcare segment as of March 31, 2022 and March 31, 2021 was 543 and 114, respectively.

 

 

The number of Managed Services revenue-generating professionals within our Education segment as of March 31, 2022 and March 31, 2021 was 92 and 52, 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.

 
(6) During the first quarter of 2022, we reclassified certain Digital revenue-generating professionals within our Healthcare and Education segments to our Commercial segment as these professionals can provide services across all of our industries. This reclassification did not impact the total headcount within our Digital capability for any period. The prior period headcount has been revised for consistent presentation.
 
The number of revenue-generating professionals within our Healthcare segment at December 31, 2020, March 31, 2021, June 30, 2021, September 30, 2021 and December 31, 2021 were 1,117; 1,130; 1,443; 1,575; and 1,596, respectively.
 
The number of revenue-generating professional within our Education segment at December 31, 2020, March 31, 2021, June 30, 2021, September 30, 2021 and December 31, 2021 were 873; 871; 885; 958; and 1,050, respectively.
 
The number of revenue-generating professional within our Commercial segment at December 31, 2020, March 31, 2021, June 30, 2021, September 30, 2021 and December 31, 2021 were 1,059; 1,115; 1,131; 1,191; and 1,130, respectively.
 

N/M - Not Meaningful

 

HURON CONSULTING GROUP INC.

RECONCILIATION OF NET INCOME

TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (7)

(In thousands)

(Unaudited)

 

 

Three Months Ended

March 31,

 

2022

 

2021

Revenues

$

260,049

 

 

$

203,213

 

Net income

$

26,852

 

 

$

5,405

 

Add back:

 

 

 

Income tax expense

 

11,275

 

 

 

1,536

 

Interest expense, net of interest income

 

2,196

 

 

 

1,719

 

Depreciation and amortization

 

7,122

 

 

 

6,551

 

Earnings before interest, taxes, depreciation and amortization (EBITDA) (7)

 

47,445

 

 

 

15,211

 

Add back:

 

 

 

Restructuring and other charges

 

1,555

 

 

 

628

 

Other losses

 

12

 

 

 

42

 

Transaction-related expenses

 

50

 

 

 

170

 

Unrealized gain on preferred stock investment

 

(26,964

)

 

 

 

Foreign currency transaction losses, net

 

19

 

 

 

403

 

Adjusted EBITDA (7)

$

22,117

 

 

$

16,454

 

Adjusted EBITDA as a percentage of revenues (7)

 

8.5

%

 

 

8.1

%

 

HURON CONSULTING GROUP INC.

RECONCILIATION OF NET INCOME TO ADJUSTED NET INCOME (7)

(In thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended

March 31,

 

2022

 

2021

Net income

$

26,852

 

 

$

5,405

 

Weighted average shares - diluted

 

21,167

 

 

 

22,341

 

Diluted earnings per share

$

1.27

 

 

$

0.24

 

Add back:

 

 

 

Amortization of intangible assets

 

2,860

 

 

 

2,399

 

Restructuring and other charges

 

1,555

 

 

 

628

 

Other losses

 

12

 

 

 

42

 

Transaction-related expenses

 

50

 

 

 

170

 

Unrealized gain on preferred stock investment

 

(26,964

)

 

 

 

Tax effect of adjustments

 

5,959

 

 

 

(858

)

Total adjustments, net of tax

 

(16,528

)

 

 

2,381

 

Adjusted net income (7)

$

10,324

 

 

$

7,786

 

Adjusted weighted average shares - diluted

 

21,167

 

 

 

22,341

 

Adjusted diluted earnings per share (7)

$

0.49

 

 

$

0.35

 

(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 the United States.

 

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