Huron Consulting Group Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Huron Consulting Group Inc. has filed its quarterly report (10-Q) for the period ending March 31, 2024.</b>

AI Summary

Huron Consulting Group Inc. (HURN) filed a Quarterly Report (10-Q) with the SEC on April 30, 2024. Huron Consulting Group Inc. filed its 10-Q report for the period ending March 31, 2024. The filing covers the first quarter of fiscal year 2024. The company's principal business is Management Consulting Services. Huron Consulting Group Inc. is incorporated in Delaware. The company's headquarters are located at 550 West Van Buren Street, Chicago, IL.

Why It Matters

For investors and stakeholders tracking Huron Consulting Group Inc., this filing contains several important signals. This 10-Q filing provides investors with an update on the company's financial performance and operational status for the first quarter of 2024. The detailed financial information within the report is crucial for understanding the company's current business health and future prospects.

Risk Assessment

Risk Level: low — Huron Consulting Group Inc. shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain any immediate red flags or significant deviations from typical reporting.

Analyst Insight

Review the detailed financial statements and segment performance within the 10-Q to assess revenue trends and profitability drivers for Q1 2024.

Key Numbers

• 2024-03-31 — Period of Report (Quarterly filing)
• 2024-04-30 — Filed As Of Date (Quarterly filing)
• 2024-01-01 — Quarter Start Date (Q1 2024)
• 2023-03-31 — Prior Year Q1 End Date (Q1 2023)

Key Players & Entities

• Huron Consulting Group Inc. (company) — Filer
• 2024-03-31 (date) — Period of report
• 2024-04-30 (date) — Filed as of date
• 8742 (industry_code) — Standard Industrial Classification
• DE (state) — State of incorporation
• 550 WEST VAN BUREN STREET (address) — Business address
• CHICAGO (city) — Business address
• IL (state) — Business address

FAQ

Industry Context

Huron Consulting Group Inc. operates within the Management Consulting Services industry, providing advisory and implementation services to clients.

Regulatory Implications

The filing is made under the Securities Exchange Act of 1934, requiring public companies to submit regular financial disclosures.

What Investors Should Do

1. Analyze the company's revenue streams and segment performance for Q1 2024.
2. Examine any changes in the company's balance sheet and cash flow statement.
3. Review management's discussion and analysis for insights into operational performance and outlook.

Key Dates

• 2024-03-31: Quarter End Date — End of reporting period for the 10-Q filing.
• 2024-04-30: Filing Date — Date the 10-Q was officially filed with the SEC.

Year-Over-Year Comparison

This is the initial filing for the period ending March 31, 2024, and a comparison to the prior period's 10-Q will be available once that filing is processed.

Key Financial Figures

• $0.01 — ich registered Common Stock, par value $0.01 per share HURN NASDAQ Global Select Mar

Filing Documents

• hurn-20240331.htm (10-Q) — 1177KB
• exhibit101rothsmaamendment.htm (EX-10.1) — 8KB
• hurn2024331exhibit311.htm (EX-31.1) — 12KB
• hurn2024331exhibit312.htm (EX-31.2) — 13KB
• hurn2024331exhibit321.htm (EX-32.1) — 8KB
• hurn2024331exhibit322.htm (EX-32.2) — 8KB
• 0001289848-24-000119.txt (&nbsp;) — 6711KB
• hurn-20240331.xsd (EX-101.SCH) — 42KB
• hurn-20240331_cal.xml (EX-101.CAL) — 74KB
• hurn-20240331_def.xml (EX-101.DEF) — 243KB
• hurn-20240331_lab.xml (EX-101.LAB) — 601KB
• hurn-20240331_pre.xml (EX-101.PRE) — 435KB
• hurn-20240331_htm.xml (XML) — 909KB

– Financial Information

Part I – Financial Information

Consolidated Financial Statements (Unaudited)

Item 1. Consolidated Financial Statements (Unaudited) Consolidated Balance Sheets 1 Consolidated Statements of Operations and Other Comprehensive Income 2 Consolidated Statements of Stockholders' Equity 3 Consolidated Statements of Cash Flows 4

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 5

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 20

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 34

Controls and Procedures

Item 4. Controls and Procedures 35

– Other Information

Part II – Other Information

Legal Proceedings

Item 1. Legal Proceedings 35

Risk Factors

Item 1A. Risk Factors 35

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 35

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 36

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 36

Other Information

Item 5. Other Information 36

Exhibits

Item 6. Exhibits 37 Signature 38 Table of Contents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

CONSOLIDATED FINANCIAL STATEMENTS

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS HURON CONSULTING GROUP INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) (Unaudited) March 31, 2024 December 31, 2023 Assets Current assets: Cash and cash equivalents $ 18,642 $ 12,149 Receivables from clients, net of allowances of $ 18,233 and $ 17,284 , respectively 215,141 162,566 Unbilled services, net of allowances of $ 4,675 and $ 5,984 , respectively 173,081 190,869 Income tax receivable 9,339 6,385 Prepaid expenses and other current assets 34,755 28,491 Total current assets 450,958 400,460 Property and equipment, net 24,578 23,728 Deferred income taxes, net 2,299 2,288 Long-term investments 73,467 75,414 Operating lease right-of-use assets 22,898 24,131 Other non-current assets 100,005 92,336 Intangible assets, net 25,649 18,074 Goodwill 647,100 625,711 Total assets $ 1,346,954 $ 1,262,142 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 13,963 $ 10,074 Accrued expenses and other current liabilities 36,640 33,087 Accrued payroll and related benefits 87,675 225,921 Current maturities of long-term debt 13,750 — Current maturities of operating lease liabilities 11,338 11,032 Deferred revenues 24,722 22,461 Total current liabilities 188,088 302,575 Non-current liabilities: Deferred compensation and other liabilities 38,932 35,665 Long-term debt, net of current portion 558,897 324,000 Operating lease liabilities, net of current portion 36,767 38,850 Deferred income taxes, net 28,664 28,160 Total non-current liabilities 663,260 426,675 Commitments and contingencies Stockholders' equity Common stock; $ 0.01 par value; 500,000,000 shares authorized; 21,237,828 and 21,316,441 shares issued, respectively 212 212 Treasury stock, at cost, 3,061,291 and 2,852,296 shares, respectively ( 159,605 ) ( 142,136 ) Additional paid-in capital 200,235 236,962 Retained earnings 433,033 415,027 Accumulated other comprehensive inc

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share amounts) (Unaudited) 1. Description of Business Huron is a global professional services firm that partners with clients to develop growth strategies, optimize operations and accelerate digital transformation, including using an enterprise portfolio of technology, data and analytics solutions, to empower clients to own their future. By collaborating with clients, embracing diverse perspectives, encouraging new ideas and challenging the status quo, we create sustainable results for the organizations we serve. We provide our services and products and manage our business under three operating segments: Healthcare, Education, and Commercial, which align our business by industry. The Commercial segment includes all industries outside of healthcare and education, including, but not limited to, financial services and energy and utilities. We also provide revenue reporting across two principal capabilities: i) Consulting and Managed Services and ii) Digital, which are methods by which we deliver our services and products. See Note 14 "Segment Information" for more information. 2. Basis of Presentation and Significant Accounting Policies The accompanying unaudited consolidated financial statements reflect the financial position, results of operations, and cash flows as of and for the three months ended March 31, 2024 and 2023. These financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") for Quarterly Reports on Form 10-Q. Accordingly, these financial statements do not include all of the information and note disclosures required by accounting principles generally accepted in the United States of America ("GAAP") for annual financial statements. In the opinion of management, these financial statements reflect all adjustments of a normal, recurring nature necessary for the fair statement of our f

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share amounts) (Unaudited) 4. Goodwill and Intangible Assets Goodwill The table below sets forth the changes in the carrying value of goodwill by reportable segment for the three months ended March 31, 2024. Healthcare Education Commercial Total Balance as of December 31, 2023: Goodwill $ 644,983 $ 123,652 $ 312,968 $ 1,081,603 Accumulated impairment losses ( 190,024 ) ( 1,417 ) ( 264,451 ) ( 455,892 ) Goodwill, net as of December 31, 2023 $ 454,959 $ 122,235 $ 48,517 $ 625,711 Goodwill recorded in connection with business acquisitions — 21,313 76 21,389 Goodwill, net as of March 31, 2024 $ 454,959 $ 143,548 $ 48,593 $ 647,100 First Quarter 2024 Acquisitions On January 1, 2024, we completed the acquisition of the data analytics services team of Vlamis Software Solutions, Inc. ("Vlamis"). The results of operations of Vlamis are included within our consolidated financial statements as of the acquisition date and allocated among our Education and Commercial segments based on the engagements delivered by the business. On March 1, 2024, we completed the acquisition of Grenzebach Glier and Associates, Inc. ("GG+A"), a philanthropic management consulting firm that helps education institutions and other nonprofit organizations build and accelerate the philanthropic programs that support their mission. The results of operations of GG+A are included within our consolidated financial statements and results of operations of our Education segment as of the acquisition date. The acquisitions of Vlamis and GG+A are not significant to our consolidated financial statements individually or in the aggregate as of and for the three months ended March 31, 2024. These acquisitions were accounted for using the acquisition method of accounting. Contract assets and contract liabilities are recorded at their carrying value under Topic 606: Revenue from Contracts with Customers. The curr

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share amounts) (Unaudited) Intangible asset amortization expense was $ 1.7 million and $ 2.2 million for the three months ended March 31, 2024 and 2023, respectively. The table below sets forth the estimated annual amortization expense for the intangible assets recorded as of March 31, 2024. Year Ending December 31, Estimated Amortization Expense 2024 $ 6,509 2025 $ 6,686 2026 $ 4,965 2027 $ 3,550 2028 $ 2,604 Actual future amortization expense could differ from these estimated amounts as a result of future acquisitions, dispositions, and other factors. 5. Revenues For the three months ended March 31, 2024 and 2023, we recognized revenues of $ 356.0 million and $ 317.9 million, respectively. Of the $ 356.0 million recognized in the first quarter of 2024, we recognized revenues of $ 8.3 million from obligations satisfied, or partially satisfied, in prior periods, of which $ 7.5 million was due to changes in the estimates of our variable consideration under performance-based billing arrangements and $ 0.8 million was due to the release of allowances on receivables from clients and unbilled services. Of the $ 317.9 million recognized in the first quarter of 2023, we recognized revenues of $ 1.2 million from obligations satisfied, or partially satisfied, in prior periods due to the release of allowances on receivables from clients and unbilled services. During the first quarter of 2023, we also recognized a $ 2.5 million decrease to revenues due to changes in the estimates of our variable consideration under performance-based billing arrangements. As of March 31, 2024, we had $ 221.3 million of remaining performance obligations under engagements with original expected durations greater than one year. These remaining performance obligations exclude variable consideration which has been excluded from the total transaction price due to the constraint and performance obliga

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share amounts) (Unaudited) 6. Earnings Per Share Basic earnings per share excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding for the period, excluding unvested restricted common stock. Diluted earnings per share reflects the potential reduction in earnings per share that could occur if securities or other contracts to issue common stock were exercised or converted into common stock under the treasury stock method. Such securities or other contracts include unvested restricted stock awards, unvested restricted stock units, and outstanding common stock options, to the extent dilutive. In periods for which we report a net loss, diluted weighted average common shares outstanding excludes all potential common stock equivalents as their impact on diluted net loss per share would be anti-dilutive. Earnings per share under the basic and diluted computations are as follows: Three Months Ended March 31, 2024 2023 Net income $ 18,006 $ 13,419 Weighted average common shares outstanding – basic 18,196 19,119 Weighted average common stock equivalents 747 580 Weighted average common shares outstanding – diluted 18,943 19,699 Net income per basic share $ 0.99 $ 0.70 Net income per diluted share $ 0.95 $ 0.68 Less than 0.1 million shares related to unvested restricted stock and outstanding common stock options were excluded from the computation of the weighted average common stock equivalents presented above for the three months ended March 31, 2023 as they were anti-dilutive. There were no anti-dilutive securities for the three months ended March 31, 2024. In November 2020, our board of directors authorized a share repurchase program permitting us to repurchase up to $ 50 million of our common stock through December 31, 2021.The share repurchase program has been subsequently extended and increased, most recently i

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands, except per share amounts) (Unaudited) 7. Financing Arrangements The Company has a $ 600 million senior secured revolving credit facility (the "Revolver") and a $ 275 million senior secured term loan facility (the "Term Loan"), subject to the terms of the Third Amended and Restated Credit Agreement dated as of November 15, 2022 (as amended, the "Amended Credit Agreement"), both of which fully mature on November 15, 2027 . The Term Loan was established in February 2024 with the execution of Amendment No. 2 to the Third Amended and Restated Credit Agreement. The Term Loan is subject to scheduled quarterly amortization payments of $ 3.4 million beginning June 30, 2024 through the maturity date of November 15, 2027 , at which time the outstanding principal balance and all accrued interest will be due. As of March 31, 2024, we had total borrowings outstanding under our Amended Credit Agreement of $ 574.0 million, consisting of $ 299.0 million outstanding under the Revolver and $ 275.0 million outstanding under the Term Loan. A summary of the scheduled maturities of those borrowings follows: Scheduled Maturities of Long-Term Debt 2024 $ 10,312 2025 $ 13,750 2026 $ 13,750 2027 $ 536,188 The initial borrowings under the Revolver were used to refinance borrowings outstandin

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