Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Huron Consulting Group Inc. | a8k-preliminaryearningsrel.htm |
| EX-99.1 - EXHIBIT 99.1 - Huron Consulting Group Inc. | exhibit991-preliminaryearn.htm |
Exhibit 99.2
2
FORWARD-LOOKING STATEMENTS
© 2017 HURON CONSULTING GROUP INC.
AND AFFILIATES
Statements in this presentation 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 our current expectations about our 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; failure to complete the pending acquisition of Innosight or any material delay in the timing of such
acquisition; 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 our Annual Report on Form 10-K for the year ended December 31, 2015, 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. We disclaim any obligation to update or revise any forward-looking statements as a
result of new information or future events, or for any other reason.
AGENDA
3 © 2017 HURON CONSULTING GROUP INC. AND AFFILIATES
1 Preliminary Unaudited 2016 Results
2 Innosight Introduction
3 2017 Outlook
PRELIMINARY UNAUDITED
2016 RESULTS
1
5
FINANCIAL UPDATE
PRELIMINARY UNAUDITED 2016 RESULTS(1)
© 2017 HURON CONSULTING GROUP INC.
AND AFFILIATES
(1) The company’s results are preliminary and unaudited and may vary from preliminary estimates after the completion of customary year-end
processes and reviews.
(2) See accompanying appendix for reconciliations of adjusted EBITDA and adjusted diluted earnings per share, which are non-GAAP measures,
to the most comparable GAAP measures.
• Revenues for full year 2016 are expected to increase
3.9% to $726.3 million compared to $699.0 million for full
year 2015
Revenue
• Adjusted EBITDA for full year 2016 is expected to be
$128.5 million compared to $139.3 million for full year
2015
Adjusted EBITDA (2)
• Adjusted diluted earnings per share from continuing
operations for full year 2016 is expected to increase
7.4% to $3.21 compared to $2.99 for full year 2015
Adjusted EPS (2)
INNOSIGHT INTRODUCTION
2
3 global locations
with offices in the U.S., Singapore
and Switzerland
Named one of
Forbes’ America’s
Best Management
Consulting Firms
90+ employees
who help clients transform
for the future
Ranked in the Vault
Consulting 50 in
2017
7
INTRODUCING INNOSIGHT
© 2017 HURON CONSULTING GROUP INC.
AND AFFILIATES
+ A global strategy consulting firm
entirely focused on growth
transformation
+ Founded in 2000 by renowned
strategists Mark Johnson and
Clayton Christensen, a Harvard
Business School Professor,
author and the world’s foremost
authority on disruptive
innovation
8 © 2017 HURON CONSULTING GROUP INC. AND AFFILIATES
Create Growth Strategies
Build Innovation Capabilities
Accelerate New Growth Initiatives
HELPING CLIENTS ACHIEVE REPEATABLE AND
SUSTAINABLE BUSINESS GROWTH & INNOVATION
A PURE-PLAY FOCUS ON THREE CORE CAPABILITIES
9
STRONG TRACK RECORD OF
DIVERSIFIED GROWTH
© 2017 HURON CONSULTING GROUP INC.
AND AFFILIATES
+ 20% annualized revenue
growth rate since 2013
+ Profitable business model
with EBITDA margins
exceeding 20% since 2014
(1)
31%
25%
15%
12%
6%
5%
3% 3%
Revenue by Industry(1) Life Sciences
Manufacturing
Healthcare - Payer
Infrastructure, Telecom & IT
Energy, Oil & Gas
Financial Services
Consumer Products
Other
(1) Represents revenue generated in 2014 to YTD Nov-16
10
Strengthens Huron’s ability to lead comprehensive transformation for
our clients to help them stay competitive in disrupted and/or rapidly
evolving industries
Combines actionable growth and innovation strategies with deep
industry and operational expertise to provide services from
planning to execution
Accelerates clients’ strategic transformations and innovations by
creating aligned and sustainable teams, cultures and
organizations
Advances Huron’s enterprise strategy of combining broad capabilities
with deep industry expertise and leveraging collaboration to drive a
competitive advantage in the markets we serve
+
11
TRANSACTION SUMMARY
© 2017 HURON CONSULTING GROUP INC.
AND AFFILIATES
(1) This non-GAAP adjusted diluted earnings per share estimate cannot be reconciled to GAAP diluted earnings per share because the
impact of acquisition related adjustments on earnings, as required by GAAP, cannot be reasonably estimated as the information needed is
not currently available.
• $100 million at closing: $90 million in cash and $10 million in Huron common stock
• Contingent consideration of up to $35 million based on achievement of certain
financial metrics over a four-year period
Purchase Price
• Expected to be accretive to 2017 adjusted diluted earnings per share in a range of
$0.08 - $0.10, net of deal costs and prorated for 10 months(1)Accretion
• March 2017 pending customary closing conditions
Conditions &
Timing
2017 OUTLOOK
3
13
2017 OUTLOOK
© 2017 HURON CONSULTING GROUP INC.
AND AFFILIATES
(1) See accompanying appendix for reconciliations of adjusted EBITDA and adjusted diluted earnings per share, which are non-GAAP measures,
to the most comparable GAAP measures.
(2) Free cash flow, a non-GAAP measure, is defined as cash from operations of $115-125 million, minus capital expenditures of $25 million.
(3) The 2017 guidance presented above includes the results of Innosight.
• $750.0 to $790.0 millionRevenue
• $112.5 to $124.5 millionAdjusted EBITDA (1)
• $2.40 to $2.70Adjusted EPS (1)
• $90.0 to $100.0 millionFree Cash Flow (2)
14 .
APPENDIX
In evaluating the company’s financial performance and outlook, management uses earnings before interest, taxes,
depreciation and amortization (“EBITDA”), adjusted EBITDA, adjusted EBITDA as a percentage of revenues, adjusted
net income from continuing operations, adjusted diluted earnings per share from continuing operations and free cash
flow, which are non-GAAP measures. Our management uses these non-GAAP financial measures to gain an
understanding of our 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 our ongoing business in a manner that allows for meaningful period-
to-period comparisons. Management also uses these non-GAAP financial measures when publicly providing our
business outlook, for internal management purposes, and as a basis for evaluating potential acquisitions and
dispositions. We believe 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.
15
RECONCILIATIONS OF NON-GAAP MEASURES TO
COMPARABLE GAAP MEASURES
16
RECONCILIATIONS OF NON-GAAP MEASURES
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO ADJUSTED EARNINGS BEFORE
INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (EBITDA) (IN MILLIONS)
2012 2013 2014 2015 2016
2017 Guidance
Low High
Revenues $ 441 $ 538 $ 628 $ 699 $ 726 $ 750 $ 790
Net income from continuing operations $ 17 $ 52 $ 47 $ 62 $ 40 $ 18 $ 25
Add back:
Income tax expense 14 32 32 21 20 13 18
Interest & other expenses 8 6 9 20 15 18 18
Depreciation & amortization 14 13 21 42 46 63 63
EBITDA 53 103 109 145 121 112 124
Add back:
Restatement related expenses 2 - - - - - -
Restructuring charges 3 1 3 3 10 - -
Goodwill impairment 13 - - - - - -
Litigation and other (gains) losses 1 (6) (1) (9) (2) - -
Adjusted EBITDA $ 72 $ 98 $ 111 $ 139 $ 129 $ 112 $ 124
Adjusted EBITDA % 16.4% 18.2% 17.6% 19.9% 17.7% 15.0% 15.8%
17
RECONCILIATIONS OF NON-GAAP MEASURES
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO ADJUSTED NET INCOME FROM
CONTINUING OPERATIONS (IN MILLIONS, EXCEPT EARNINGS PER SHARE)
2017 Guidance
2012 2013 2014 2015 2016 Low High
Net income from continuing operations $ 17 $ 52 $ 47 $ 62 $ 40 $ 18 $ 25
Weighted average shares - diluted 22 23 23 23 21 22 22
Diluted earnings per share (EPS) $ 0.77 $ 2.26 $ 2.05 $ 2.74 $ 1.84 $ 0.85 $ 1.15
Add back:
Amortization of intangible assets 5 3 9 28 33 47 47
Restatement related expenses 2 - - - - - -
Restructuring charges 3 1 3 3 10 - -
Goodwill impairment 13 - - - - - -
Litigation and other (gains) losses 1 (6) (1) (9) (2) - -
Non-cash interest on convertible notes - - 2 7 7 8 8
Tax effect (9) 1 (5) (12) (19) (21) (21)
Total adjustments, net of tax 15 (1) 8 17 29 34 34
Net tax benefit related to "check-the-box" election - - 1 (12) - - -
Adjusted net income from continuing operations $ 32 $ 51 $ 56 $ 67 $ 69 $ 52 $ 59
Weighted average shares - diluted 22 23 23 23 21 22 22
Adjusted diluted EPS from continuing operations $ 1.41 $ 2.22 $ 2.45 $ 2.99 $ 3.21 $ 2.40 $ 2.70