Huron Consulting Group (HURN) Q4 2013 earnings summary

Executive summary

• FY13 revenue was $720.5M, up 15.1% YoY; operating income rose 63.3% to $119.9M and continuing net income reached $66.5M.

• Growth was led by Healthcare and Financial; adjusted EBITDA increased to $138.4M, with a 19.2% revenue margin.

Financial highlights

• Revenue increased $94.5M YoY, driven mainly by full-time consultant revenue, with higher average consultant numbers, billing rates and utilization.

• Operating income was $119.9M vs. $73.4M; operating margin rose to 16.6% from 11.7%, helped by revenue growth and lower restructuring and restatement costs.

• Continuing net income was $66.5M vs. $36.0M; diluted continuing EPS was $2.92 vs. $1.61.

• Adjusted net income was $67.5M and adjusted diluted continuing EPS was $2.96; adjusted EBITDA was $138.4M vs. $115.8M in FY12.

• Net litigation and settlement gains were $5.9M, including a $5.3M lawsuit settlement gain and reversal of a $1.2M prior charge, offset partly by a $0.6M former-client dispute charge.

Outlook and guidance

• Planned FY14 capital expenditures are ~$30.0M, primarily for IT equipment and leasehold improvements supporting document review and processing growth and corporate infrastructure.

• Internally generated liquidity and available revolving-credit capacity were expected to fund long-term growth, capital needs and debt service; future financing depends on profitability, receivable quality, leverage and credit-market conditions.