Huron Consulting Group (HURN) Q4 2012 earnings summary

Executive summary

• FY2012 revenue increased 3.2% to $626.0M; operating income rose 32.5% to $73.4M and net income to $36.4M from $20.5M.

• Growth in Health and Education and Legal Consulting offset a sharp decline in Financial Consulting; adjusted EBITDA reached $115.8M, 18.5% of revenue.

Financial highlights

• Revenue was $626.0M versus $606.3M in 2011; net income from continuing operations was $36.0M versus $21.5M.

• Operating income rose to $73.4M from $55.4M; operating margin increased to 11.7% from 9.1%.

• Diluted EPS from continuing operations was $1.61 versus $0.99; adjusted diluted EPS was $2.34 versus $2.11.

• Adjusted EBITDA was $115.8M, up from $110.8M; adjusted EBITDA margin was 18.5% versus 18.3%.

Outlook and guidance

• 2013 capital expenditures were projected at $25.0M, mainly for IT equipment and improvements supporting document review, processing and corporate infrastructure.

• Initiatives to broaden Financial Consulting services, add managing directors and build practice synergies were intended to lift demand during 2013.

• Extension of the federal R&D tax credit through 2013 was expected to produce a discrete Q1 2013 tax benefit and modestly lower the annual effective tax rate.