Business Wire | Jul 30, 2020 04:06PM EDT

Huron Announces Second Quarter 2020 Financial Results and Provides 2020 Guidance

Jul. 30, 2020

CHICAGO--(BUSINESS WIRE)--Jul. 30, 2020--Global professional services firm Huron (NASDAQ: HURN) today announced financial results from continuing operations for the second quarter ended June 30, 2020.

"Second quarter revenues declined 1% over the prior year period, driven by weakness in the Healthcare business that was partially offset by solid growth in the Business Advisory and Education segments," said James H. Roth, chief executive officer of Huron. "Our second quarter results were better than we had anticipated as our teams rose to the challenge of remote delivery and developed innovative solutions to support our clients in this period of heightened disruption. We remain cautious about the second half of the year given the significant impact of the ongoing pandemic on our clients, particularly those in the healthcare and education industries."

"Health systems and universities are faced with the need to evolve their business models to respond to the significant uncertainty stemming from this new environment. This change is dramatic, and while it causes less visibility for our business in the short term, we believe these issues will drive increased demand for our services in the long term," added Roth.

COVID-19 IMPACT

The worldwide spread of coronavirus (COVID-19) has created significant volatility, uncertainty and disruption to the global economy. The company is closely monitoring the impact of the pandemic on all aspects of its business, including how it will impact its clients, employees and business partners. In the first six months of 2020, as a result of the pandemic, some clients have reprioritized and delayed some projects which negatively impacted demand for certain services, primarily in the company's Healthcare and Education segments. Conversely, the COVID-19 pandemic strengthened demand for cloud-based technology and analytics solutions and certain services provided to organizations in transition within the company's Business Advisory segment.

In the second quarter of 2020, the COVID-19 pandemic negatively impacted sales and increased uncertainty in the backlog for certain services, particularly within the company's Healthcare and Education segments. Therefore, the company expects the COVID-19 pandemic to continue to have an unfavorable impact on its financial results in the second half of 2020, which is contemplated in the full year 2020 guidance provided.

SECOND QUARTER 2020 RESULTS FROM CONTINUING OPERATIONS

Revenues were $217.9 million for the second quarter of 2020, compared to $220.8 million for the second quarter of 2019.

Net income from continuing operations increased $3.0 million, or 28.4%, to $13.6 million for the second quarter of 2020 from $10.6 million for the same quarter last year. Diluted earnings per share from continuing operations increased $0.14, or 29.8%, to $0.61 for the second quarter of 2020 from $0.47 for the second quarter of 2019.

Second quarter 2020 earnings before interest, taxes, depreciation and amortization ("EBITDA")(7) increased $0.5 million, or 2.0%, to $27.4 million from $26.9 million in the same prior year period.

In addition to using EBITDA to evaluate the company's financial performance, management uses other non-GAAP financial measures, which exclude the effect of the following items (in thousands):

Three Months Ended June 30,

2020 2019

Amortization of intangible assets $ 3,194 $ 4,314

Restructuring and other charges $ 109 $ 754

Litigation and other gains $ - $ (485 )

Non-cash interest on convertible notes $ - $ 2,145

Transaction-related expenses $ - $ 2,050

Tax effect of adjustments $ (1,940 ) $ (2,282 )

Foreign currency transaction losses (gains), net $ (81 ) $ 4

Adjusted EBITDA(7) was $27.5 million, or 12.6% of revenues, in the second quarter of 2020, compared to $29.2 million, or 13.2% of revenues, in the same prior year period. Adjusted net income from continuing operations(7) was $14.9 million, or $0.68 per diluted share, for the second quarter of 2020, compared to $17.1 million, or $0.76 per diluted share, for the same prior year period.

The average number of full-time billable consultants(1) increased 9.6% to 2,588 in the second quarter of 2020 from 2,362 in the same quarter last year, primarily reflecting hiring that occurred in the second half of 2019 prior to the COVID-19 pandemic. Full-time billable consultant utilization rate(2) was 72.4% during the second quarter of 2020, compared to 77.2% during the same period last year. Average billing rate per hour for full-time billable consultants(3) was $203 for the second quarter of 2020, compared to $206 for the second quarter of 2019. The average number of full-time equivalent professionals(5) was 365 in the second quarter of 2020, compared to 327 for the same period in 2019.

YEAR-TO-DATE 2020 RESULTS FROM CONTINUING OPERATIONS

Revenues increased $15.3 million, or 3.6%, to $440.5 million for the first six months of 2020, compared to $425.2 million for the same prior year period.

Net loss from continuing operations was $28.7 million for the first six months of 2020, compared to net income from continuing operations of $13.9 million for the same prior year period. Diluted loss per share from continuing operations was $1.31 for the first six months of 2020, compared to diluted earnings per share from continuing operations of $0.62 for the first six months of 2019. Results for the first six months of 2020 reflect non-cash pretax charges totaling $59.8 million to reduce the carrying value of goodwill in the company's Strategy and Innovation and Life Sciences reporting units within the Business Advisory segment. The impairment charges are non-cash in nature and do not affect the company's liquidity or debt covenants.

Loss before interest, taxes, depreciation and amortization(7) was $16.3 million for the first six months of 2020, compared to EBITDA of $44.2 million for the first six months of 2019.

In addition to using EBITDA to evaluate the company's financial performance, management uses other non-GAAP financial measures, which exclude the effect of the following items (in thousands):

Six Months Ended June 30,

2020 2019

Amortization of intangible assets $ 6,403 $ 8,831

Restructuring and other charges $ 2,567 $ 2,029

Litigation and other gains $ (150 ) $ (941 )

Goodwill impairment charges $ 59,816 $ -

Non-cash interest on convertible notes $ - $ 4,265

Loss on sale of business $ 102 $ -

Transaction-related expenses $ - $ 2,050

Tax effect of adjustments $ (15,349 ) $ (4,235 )

Foreign currency transaction losses, net $ 439 $ (78 )

Adjusted EBITDA(7) was $46.5 million, or 10.6% of revenues, for the first six months of 2020, compared to $47.2 million, or 11.1% of revenues, for the first six months of 2019. Adjusted net income from continuing operations(7) was $24.7 million, or $1.11 per diluted share, for the first six months of 2020, compared to $25.9 million, or $1.16 per diluted share, for the same prior year period.

The average number of full-time billable consultants(1) increased 11.4% to 2,591 in the first six months of 2020 from 2,326 in the first six months of 2019, primarily reflecting hiring that occurred in the second half of 2019 prior to the COVID-19 pandemic. Full-time billable consultant utilization rate(2) was 72.7% during the first six months of 2020, compared to 76.6% during the same prior year period. Average billing rate per hour for full-time billable consultants(3) was $204 for the first six months of 2020, compared to $208 for the first six months of 2019. The average number of full-time equivalent professionals(5) was 361 in the first six months of 2020, compared to 297 in the same prior year period.

OPERATING SEGMENTS

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

The company's year-to-date 2020 revenues by operating segment as a percentage of total company revenues are as follows: Healthcare (41%); Business Advisory (31%); and Education (28%). 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 June 30, 2020.

OUTLOOK FOR 2020

Based on currently available information, the company provided guidance for full year 2020 revenues before reimbursable expenses in a range of $820 million to $860 million. The company anticipates adjusted EBITDA as a percentage of revenues in a range of 9% to 10% and non-GAAP adjusted diluted earnings per share in a range of $1.50 to $1.80.

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

SECOND QUARTER 2020 WEBCAST

The company will host a webcast to discuss its financial results today, July 30, 2020, 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 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.

Management has provided its outlook regarding adjusted EBITDA and non-GAAP 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 are not provided. Management is unable to provide guidance for these reconciling items because we 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 consultancy that collaborates with clients to drive strategic growth, ignite innovation and navigate constant change. Through a combination of strategy, expertise and creativity, we help clients accelerate operational, digital and cultural transformation, enabling the change they need 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," "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, 2019, and under "Item 1A. Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, 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 Six Months Ended June 30, June 30,

2020 2019 2020 2019

Revenues and reimbursable expenses:

Revenues $ 217,857 $ 220,754 $ 440,476 $ 425,199

Reimbursable expenses 2,970 23,534 22,273 42,151

Total revenues and 220,827 244,288 462,749 467,350 reimbursable expenses

Direct costs andreimbursable expenses(exclusive of depreciation andamortization shown inoperating expenses):

Direct costs 149,514 141,628 305,762 279,408

Amortization ofintangible assets and 1,334 1,171 2,635 2,288 software developmentcosts

Reimbursable expenses 2,866 23,657 22,255 42,326

Total direct costs and 153,714 166,456 330,652 324,022 reimbursable expenses

Operating expenses andother losses (gains), net:

Selling, general and 44,857 52,537 88,303 103,286 administrative expenses

Restructuring charges 109 754 1,718 2,029

Litigation and other - (485 ) (150 ) (941 )gains

Depreciation and 6,193 7,151 12,307 14,323 amortization

Goodwill impairment - - 59,816 - charges

Total operating expensesand other losses 51,159 59,957 161,994 118,697 (gains), net

Operating income (loss) 15,954 17,875 (29,897 ) 24,631

Other income (expense), net:

Interest expense, net of (2,916 ) (4,524 ) (5,257 ) (8,782 )interest income

Other income (expense), 3,948 695 (1,348 ) 2,912 net

Total other income 1,032 (3,829 ) (6,605 ) (5,870 )(expense), net

Income (loss) fromcontinuing operations 16,986 14,046 (36,502 ) 18,761 before taxes

Income tax expense 3,414 3,477 (7,801 ) 4,842 (benefit)

Net income (loss) from 13,572 10,569 (28,701 ) 13,919 continuing operations

Loss from discontinued (25 ) (97 ) (60 ) (143 )operations, net of tax

Net income (loss) $ 13,547 $ 10,472 $ (28,761 ) $ 13,776

Net earnings (loss) per basic share:

Net income (loss) from $ 0.62 $ 0.48 $ (1.31 ) $ 0.63 continuing operations

Loss from discontinued - - (0.01 ) - operations, net of tax

Net income (loss) $ 0.62 $ 0.48 $ (1.32 ) $ 0.63

Net earnings (loss) per diluted share:

Net income (loss) from $ 0.61 $ 0.47 $ (1.31 ) $ 0.62 continuing operations

Loss from discontinued - - (0.01 ) - operations, net of tax

Net income (loss) $ 0.61 $ 0.47 $ (1.32 ) $ 0.62

Weighted average sharesused in calculating earnings (loss) pershare:

Basic 21,869 21,997 21,848 21,933

Diluted 22,116 22,400 21,848 22,356

Comprehensive income:

Net income (loss) $ 13,547 $ 10,472 $ (28,761 ) $ 13,776

Foreign currencytranslation adjustments, 104 (359 ) (675 ) (43 )net of tax

Unrealized gain (loss)on investment, net of (5,678 ) 3,915 (5,936 ) 6,572 tax

Unrealized loss on cashflow hedging (1,705 ) (612 ) (3,390 ) (849 )instruments, net of tax

Other comprehensive (7,279 ) 2,944 (10,001 ) 5,680 income (loss)

Comprehensive income $ 6,268 $ 13,416 $ (38,762 ) $ 19,456 (loss)

HURON CONSULTING GROUP INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)

June 30, December 31, 2020 2019

Assets

Current assets:

Cash and cash equivalents $ 83,212 $ 11,604

Receivables from clients, net 117,632 116,571

Unbilled services, net 82,932 79,937

Income tax receivable 323 2,376

Prepaid expenses and other current assets 13,863 14,248

Total current assets 297,962 224,736

Property and equipment, net 37,082 38,413

Deferred income taxes, net 12,426 1,145

Long-term investments 59,524 54,541

Operating lease right-of-use assets 52,298 54,954

Other non-current assets 55,083 52,177

Intangible assets, net 24,916 31,625

Goodwill 586,235 646,680

Total assets $ 1,125,526 $ 1,104,271

Liabilities and stockholders' equity

Current liabilities:

Accounts payable $ 5,046 $ 7,944

Accrued expenses and other current liabilities 23,532 18,554

Accrued payroll and related benefits 80,066 141,605

Current maturities of long-term debt 536 529

Current maturities of operating lease 8,559 7,469 liabilities

Deferred revenues 35,044 28,443

Total current liabilities 152,783 204,544

Non-current liabilities:

Deferred compensation and other liabilities 38,557 28,635

Long-term debt, net of current portion 331,054 208,324

Operating lease liabilities, net of current 66,547 69,233 portion

Deferred income taxes, net 571 8,070

Total non-current liabilities 436,729 314,262

Commitments and contingencies

Stockholders' equity

Common stock; $0.01 par value; 500,000,000shares authorized; 25,421,974 and 25,144,764 246 247 shares issued at June 30, 2020 and December 31,2019, respectively

Treasury stock, at cost, 2,556,012 and 2,425,430shares at June 30, 2020 and December 31, 2019, (128,646 ) (128,348 )respectively

Additional paid-in capital 450,391 460,781

Retained earnings 209,088 237,849

Accumulated other comprehensive income 4,935 14,936

Total stockholders' equity 536,014 585,465

Total liabilities and stockholders' equity $ 1,125,526 $ 1,104,271

HURON CONSULTING GROUP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Six Months Ended June 30,

2020 2019

Cash flows from operating activities:

Net income (loss) $ (28,761 ) $ 13,776

Adjustments to reconcile net income (loss) to cash flows from operating activities:

Depreciation and amortization 14,942 17,285

Non-cash lease expense 3,880 4,397

Lease impairment charge - 805

Share-based compensation 14,527 11,483

Amortization of debt discount and issuance costs 397 5,264

Goodwill impairment charges 59,816 -

Allowances for doubtful accounts 512 170

Deferred income taxes (15,515 ) -

Loss on sale of business 102 -

Change in fair value of contingent consideration - (876 )liabilities

Changes in operating assets and liabilities, net of divestiture:

(Increase) decrease in receivables from clients, net (339 ) (6,984 )

(Increase) decrease in unbilled services, net (3,059 ) (22,105 )

(Increase) decrease in current income tax receivable / 6,546 6,486 payable, net

(Increase) decrease in other assets (1,674 ) (4,743 )

Increase (decrease) in accounts payable and other (2,787 ) (133 )liabilities

Increase (decrease) in accrued payroll and related (53,420 ) (30,462 )benefits

Increase (decrease) in deferred revenues 6,638 (570 )

Net cash provided by (used in) operating activities 1,805 (6,207 )

Cash flows from investing activities:

Purchases of property and equipment, net (4,417 ) (6,384 )

Purchases of investment securities (13,000 ) -

Investment in life insurance policies (1,540 ) (4,087 )

Capitalization of internally developed software costs (5,184 ) (4,409 )

Net cash used in investing activities (24,141 ) (14,880 )

Cash flows from financing activities:

Proceeds from exercise of stock options 646 469

Shares redeemed for employee tax withholdings (7,217 ) (4,460 )

Share repurchases (22,115 ) -

Proceeds from bank borrowings 283,000 87,500

Repayments of bank borrowings (160,263 ) (81,756 )

Payments for contingent consideration liabilities - (4,674 )

Net cash provided by (used in) financing activities 94,051 (2,921 )

Effect of exchange rate changes on cash (107 ) 78

Net increase (decrease) in cash and cash equivalents 71,608 (23,930 )

Cash and cash equivalents at beginning of the period 11,604 33,107

Cash and cash equivalents at end of the period $ 83,212 $ 9,177

HURON CONSULTING GROUP INC.

SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA

(Unaudited)

Three Months Ended Percent June 30, IncreaseSegment and Consolidated Operating 2020 2019 Results (in thousands): (Decrease)

Healthcare:

Revenues $ 85,356 $ 101,939 (16.3 )%

Operating income $ 21,171 $ 33,344 (36.5 )%

Segment operating income as a 24.8 % 32.7 % percentage of segment revenues

Business Advisory:

Revenues $ 70,470 $ 62,277 13.2 %

Operating income $ 16,684 $ 11,474 45.4 %

Segment operating income as a 23.7 % 18.4 % percentage of segment revenues

Education:

Revenues $ 62,031 $ 56,538 9.7 %

Operating income $ 16,128 $ 16,204 (0.5 )%

Segment operating income as a 26.0 % 28.7 % percentage of segment revenues

Total Company:

Revenues $ 217,857 $ 220,754 (1.3 )%

Reimbursable expenses 2,970 23,534 (87.4 )%

Total revenues and reimbursable $ 220,827 $ 244,288 (9.6 )%expenses

Statements of Operations reconciliation:

Segment operating income $ 53,983 $ 61,022 (11.5 )%

Items not allocated at the segment level:

Other operating expenses 31,638 36,481 (13.3 )%

Litigation and other gains - (485 ) N/M

Depreciation and amortization 6,391 7,151 (10.6 )%

Total operating income (loss) 15,954 17,875 (10.7 )%

Other income (expense), net 1,032 (3,829 ) N/M

Income from continuing operations $ 16,986 $ 14,046 20.9 %before taxes

Other Operating Data:

Number of full-time billable consultants (at period end) ^(1):

Healthcare 855 833 2.6 %

Business Advisory 943 883 6.8 %

Education 780 673 15.9 %

Total 2,578 2,389 7.9 %

Average number of full-time billable consultants (for the period)^ (1):

Healthcare 876 828

Business Advisory 925 870

Education 787 664

Total 2,588 2,362

HURON CONSULTING GROUP INC.

SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)

(Unaudited)

Three Months Ended June 30,

Other Operating Data (continued): 2020 2019

Full-time billable consultant utilization rate ^(2):

Healthcare 67.6 % 80.8 %

Business Advisory 75.8 % 73.1 %

Education 73.4 % 78.3 %

Total 72.4 % 77.2 %

Full-time billable consultant average billing rate per hour ^(3):

Healthcare $ 219 $ 224

Business Advisory ^(4) $ 201 $ 193

Education $ 191 $ 200

Total ^(4) $ 203 $ 206

Revenue per full-time billable consultant (in thousands):

Healthcare $ 66 $ 84

Business Advisory $ 73 $ 69

Education $ 68 $ 74

Total $ 69 $ 76

Average number of full-time equivalents (for the period) ^ (5):

Healthcare 280 271

Business Advisory 25 13

Education 60 43

Total 365 327

Revenue per full-time equivalent (in thousands):

Healthcare $ 97 $ 120

Business Advisory $ 128 $ 166

Education $ 147 $ 167

Total $ 107 $ 128

HURON CONSULTING GROUP INC.

SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)

(Unaudited)

Six Months Ended Percent June 30, IncreaseSegment and Consolidated Operating 2020 2019 Results (in thousands): (Decrease)

Healthcare:

Revenues $ 180,934 $ 195,621 (7.5 )%

Operating income $ 45,221 $ 61,195 (26.1 )%

Segment operating income as a 25.0 % 31.3 % percentage of segment revenues

Business Advisory:

Revenues $ 135,375 $ 121,083 11.8 %

Operating income $ 26,526 $ 21,055 26.0 %

Segment operating income as a 19.6 % 17.4 % percentage of segment revenues

Education:

Revenues $ 124,167 $ 108,495 14.4 %

Operating income $ 29,244 $ 28,822 1.5 %

Segment operating income as a 23.6 % 26.6 % percentage of segment revenues

Total Company:

Revenues $ 440,476 $ 425,199 3.6 %

Reimbursable expenses 22,273 42,151 (47.2 )%

Total revenues and reimbursable $ 462,749 $ 467,350 (1.0 )%expenses

Statements of Operations reconciliation:

Segment operating income $ 100,991 $ 111,072 (9.1 )%

Items not allocated at the segment level:

Other operating expenses 58,784 73,059 (19.5 )%

Litigation and other gains, net (150 ) (941 ) (84.1 )%

Depreciation and amortization expense 12,438 14,323 (13.2 )%

Goodwill impairment charges ^(6) 59,816 - N/M

Total operating income (loss) (29,897 ) 24,631 N/M

Other expense, net (6,605 ) (5,870 ) 12.5 %

Income (loss) from continuing $ (36,502 ) $ 18,761 N/Moperations before taxes

Other Operating Data:

Number of full-time billable consultants (at period end) ^(1):

Healthcare 855 833 2.6 %

Business Advisory 943 883 6.8 %

Education 780 673 15.9 %

Total 2,578 2,389 7.9 %

Average number of full-time billable consultants (for the period)^ (1):

Healthcare 887 824

Business Advisory 922 854

Education 782 648

Total 2,591 2,326

HURON CONSULTING GROUP INC.

SEGMENT OPERATING RESULTS AND OTHER OPERATING DATA (CONTINUED)

(Unaudited)

Six Months Ended June 30,

Other Operating Data (continued): 2020 2019

Full-time billable consultant utilization rate ^(2):

Healthcare 69.6 % 79.7 %

Business Advisory 73.7 % 73.1 %

Education 74.8 % 77.4 %

Total 72.7 % 76.6 %

Full-time billable consultant average billing rate per hour ^(3):

Healthcare $ 224 $ 224

Business Advisory ^(4) $ 199 $ 196

Education $ 189 $ 202

Total ^(4) $ 204 $ 208

Revenue per full-time billable consultant (in thousands):

Healthcare $ 139 $ 163

Business Advisory $ 140 $ 137

Education $ 136 $ 147

Total $ 139 $ 149

Average number of full-time equivalents (for the period) ^ (5):

Healthcare 279 247

Business Advisory 22 11

Education 60 39

Total 361 297

Revenue per full-time equivalent (in thousands):

Healthcare $ 205 $ 248

Business Advisory $ 275 $ 361

Education $ 292 $ 332

Total $ 224 $ 263

_____________________(1) Consists of full-time professionals who provide consulting services and generate revenues based on the number of hours worked.

Utilization rate for full-time billable consultants is calculated by dividing the number of hours full-time billable consultants worked on(2) client assignments during a period by the total available working hours for these consultants during the same period, assuming a forty-hour work week, less paid holidays and vacation days.

Average billing rate per hour for full-time billable consultants is(3) calculated by dividing revenues for a period by the number of hours worked on client assignments during the same period.

The Business Advisory segment includes operations of Huron Eurasia India. Absent the impact of Huron Eurasia India, the average billing rate per(4) hour for the Business Advisory segment would have been $220 and $215 for the three months ended June 30, 2020 and 2019, respectively; and $222 and $219 for the six months ended June 30, 2020 and 2019, respectively.

Absent the impact of Huron Eurasia India, Huron's consolidated average billing rate per hour would have been $210 and $214 for the three months ended June 30, 2020 and 2019, respectively; and $212 and $216 for the six months ended June 30, 2020 and 2019, respectively.

Consists of coaches and their support staff within the Culture and Organizational Excellence solution, consultants who work variable(5) schedules as needed by clients, employees who provide managed services in our Healthcare segment, and full-time employees who provide software support and maintenance services to clients.

The non-cash goodwill impairment charges are not allocated at the segment(6) level because the underlying goodwill asset is reflective of our corporate investment in the segments. We do not include the impact of goodwill impairment charges in our evaluation of segment performance.

N/M - Not Meaningful

HURON CONSULTING GROUP INC.

RECONCILIATION OF NET INCOME (LOSS) FROM CONTINUING OPERATIONS

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

(In thousands)

(Unaudited)

Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Revenues $ 217,857 $ 220,754 $ 440,476 $ 425,199

Net income (loss) from $ 13,572 $ 10,569 $ (28,701 ) $ 13,919 continuing operations

Add back:

Income tax expense 3,414 3,477 (7,801 ) 4,842 (benefit)

Interest expense, net 2,916 4,524 5,257 8,782 of interest income

Depreciation and 7,527 8,322 14,942 16,611 amortization

Earnings (loss) beforeinterest, taxes,depreciation and 27,429 26,892 (16,303 ) 44,154 amortization (EBITDA) ^(7)

Add back:

Restructuring and other 109 754 2,567 2,029 charges

Litigation and other - (485 ) (150 ) (941 )gains

Goodwill impairment - - 59,816 - charges

Loss on sale of - - 102 - business

Transaction-related - 2,050 - 2,050 expenses

Foreign currencytransaction losses (81 ) 4 439 (78 )(gains), net

Adjusted EBITDA ^(7) $ 27,457 $ 29,215 $ 46,471 $ 47,214

Adjusted EBITDA as apercentage of revenues 12.6 % 13.2 % 10.6 % 11.1 %^(7)

HURON CONSULTING GROUP INC.

RECONCILIATION OF NET INCOME (LOSS) FROM CONTINUING OPERATIONS

TO ADJUSTED NET INCOME FROM CONTINUING OPERATIONS ^(7)

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Net income (loss) from $ 13,572 $ 10,569 $ (28,701 ) $ 13,919 continuing operations

Weighted average shares - 22,116 22,400 21,848 22,356 diluted

Diluted earnings (loss)per share from continuing $ 0.61 $ 0.47 $ (1.31 ) $ 0.62 operations

Add back:

Amortization of intangible 3,194 4,314 6,403 8,831 assets

Restructuring and other 109 754 2,567 2,029 charges

Litigation and other gains - (485 ) (150 ) (941 )

Goodwill impairment - - 59,816 - charges

Non-cash interest on - 2,145 - 4,265 convertible notes

Loss on sale of business - - 102 -

Transaction-related - 2,050 - 2,050 expenses

Tax effect of adjustments (1,940 ) (2,282 ) (15,349 ) (4,235 )

Total adjustments, net of 1,363 6,496 53,389 11,999 tax

Adjusted net income from $ 14,935 $ 17,065 $ 24,688 $ 25,918 continuing operations ^(7)

Adjusted weighted average 22,116 22,400 22,223 22,356 shares - diluted ^(8)

Adjusted diluted earningsper share from continuing $ 0.68 $ 0.76 $ 1.11 $ 1.16 operations ^(7)

In evaluating the company's financial performance and outlook, management uses earnings (loss) before interest, taxes, depreciation and amortization ("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(7) 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.

As the company reported a net loss for the six months ended June 30, 2020, GAAP diluted weighted average shares outstanding equals the basic weighted average shares outstanding for that period. The non-GAAP adjustments(8) described above resulted in adjusted net income from continuing operations for the first six months of 2020. Therefore, dilutive common stock equivalents have been included in the calculation of adjusted diluted weighted average shares outstanding.

View source version on businesswire.com: https://www.businesswire.com/news/home/20200730005881/en/

CONTACT: MEDIA CONTACT Allie Bovis abovis@huronconsultinggroup.com

CONTACT: INVESTOR CONTACT John D. Kelly investor@huronconsultinggroup.com