Huron Announces First Quarter 2018 Financial Results and Affirms 2018 Guidance
CHICAGO--(BUSINESS WIRE)--May 1, 2018--Global professional services firm Huron (NASDAQ: HURN) today announced financial results from continuing operations for the first quarter ended March 31, 2018.
“Led by strong growth in our Education segment, our first quarter results were consistent with our expectations, and today we affirm our full year guidance,” said James H. Roth, chief executive officer and president of Huron. “The Healthcare segment continued to make progress in its operational turnaround, and the Business Advisory segment reported solid revenue growth compared to prior year results.”
FIRST QUARTER 2018 RESULTS FROM CONTINUING OPERATIONS
Revenues increased $4.8 million, or 2.6%, to $193.7 million for the first quarter of 2018 compared to $188.8 million for the first quarter of 2017. First quarter 2018 revenues included $6.4 million of incremental revenues due to the full quarter impact of Huron’s acquisition of Innosight, which was completed in March 2017, as well as revenues from the company’s acquisition of the international assets of ADI Strategies, which was completed in April 2017 and has since been fully integrated into the Business Advisory segment.
Net loss from continuing operations was $3.2 million for the first quarter of 2018 compared to net income from continuing operations of $5.2 million for the same period last year. Diluted loss per share from continuing operations was $0.15 for the first quarter of 2018, compared to diluted earnings per share from continuing operations of $0.24 for the first quarter of 2017.
First quarter 2018 earnings before interest, taxes, depreciation and amortization (“EBITDA”) (5) was $12.2 million, compared to EBITDA of $26.8 million in the same period last year.
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):
Adjusted EBITDA (5) was $13.7 million, or 7.1% of revenues, in the first quarter of 2018, compared to $27.1 million, or 14.4% of revenues, in the same quarter last year. Adjusted net income from continuing operations (5) was $4.2 million, or $0.19 per diluted share, for the first quarter of 2018, compared to $11.8 million, or $0.55 per diluted share, for the same period in 2017.
The average number of full-time billable consultants (1) increased 8.2% to 2,126 in the first quarter of 2018 compared to 1,965 in the same quarter last year. Full-time billable consultant utilization rate (2) was 73.7% during the first quarter of 2018 compared to 73.9% during the same period last year. Average billing rate per hour for full-time billable consultants (3) was $198 for the first quarter of 2018 compared to $216 for the first quarter of 2017. The average number of full-time equivalent professionals (4) was 264 in the first quarter of 2018 compared to 276 for the same period in 2017.
Huron’s results reflect a portfolio of service offerings focused on helping clients address complex business challenges.
The company’s first quarter 2018 revenues by operating segment as a percentage of total company revenues are as follows: Healthcare (46%); Business Advisory (29%); and Education (25%). Financial results by segment are included in the attached schedules and in Huron’s forthcoming Quarterly Report on Form 10-Q filing for the quarter ended March 31, 2018.
OUTLOOK FOR 2018(6)
Based on currently available information, the company affirmed guidance for full year 2018 revenues before reimbursable expenses in a range of $720.0 million to $760.0 million. The company also anticipates net income in a range of $23.0 million to $29.5 million, and both EBITDA and adjusted EBITDA in a range of $86.5 million to $98.5 million. GAAP diluted earnings per share is expected in a range of $1.05 to $1.35, and non-GAAP adjusted diluted earnings per share is expected in a range of $2.10 to $2.40.
Management will provide a more detailed discussion of its outlook during the company’s earnings conference call webcast.
FIRST QUARTER 2018 WEBCAST
The company will host a webcast to discuss its financial results today, May 1, 2018, 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 at 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(5)
In evaluating the company’s financial performance and outlook, management uses EBITDA, adjusted EBITDA, adjusted EBITDA as a percentage of revenues, adjusted net income from continuing operations, and adjusted diluted earnings per share from continuing operations, which are non-GAAP measures. Management 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.
Huron is a global consultancy that helps its clients drive growth, enhance performance and sustain leadership in the markets they serve. The company partners with clients to develop strategies and implement solutions that enable the transformative change its clients need to own their future. 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 requirements and needs, 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,” 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 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, 2017, 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.
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