Huron Consulting Group Inc. - Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed on May 3, 2010, by Huron Consulting Group Inc. The filing primarily reports on the results of the Annual Meeting of Stockholders held on May 3, 2010, and provides a correction to previously disclosed operating data for the first quarter of 2010 under Regulation FD.
Key Financial Metrics and Voting Results
Shareholder Voting: A total of 20,295,163 shares were present at the Annual Meeting. Shareholders approved the election of three Class III directors, an amendment to the 2004 Omnibus Stock Plan to increase available shares by 650,000, and the ratification of PricewaterhouseCoopers LLP as independent auditors.
Financial Corrections (Q1 2010): The filing corrects operating metrics for the Legal Consulting segment and the Total Company. Total revenues remain unchanged, but the revenue mix was adjusted: revenue attributable to full-time billable consultants decreased by $2.5 million, while revenue attributable to full-time equivalents increased by $2.5 million.
| Metric | Legal Consulting (Revised Q1 2010) | Legal Consulting (Previously Reported) | Total Company (Revised Q1 2010) | Total Company (Previously Reported) |
|---|---|---|---|---|
| Average Billing Rate (per hour) | $190 | $266 | $242 | $248 |
| Revenue per Full-Time Billable Consultant ($000s) | $46 | $64 | $72 | $74 |
| Revenue per Full-Time Equivalent ($000s) | $37 | $33 | $47 | $44 |
Material Changes and Management Commentary
Legal Consulting Segment: The segment saw an overall revenue increase of $10.2 million. This was driven by a $13.2 million increase in full-time equivalent revenues due to higher demand for document review services, partially offset by a $2.9 million decrease in full-time billable consultant revenues. The decrease in billable consultant revenue was attributed to lower demand, a reduced headcount of billable consultants, and a lower average billing rate.
Total Company: Total Company revenues decreased by $12.2 million. This decline was primarily driven by a $29.1 million decrease in full-time billable consultant revenues, attributed to a temporary decrease in demand, a weakened economy, reduced client discretionary spending, and delayed engagement decisions. Average billing rates and utilization decreased compared to the prior year. This was partially offset by a $16.9 million increase in full-time equivalent revenues due to higher demand for variable, on-demand consultants in Financial and Legal Consulting segments.
Investor Verification Checklist
- Verify the impact of the $2.5 million revenue mix correction on Q1 2010 operating margins and future guidance.
- Confirm the specific terms of the amendment to the 2004 Omnibus Stock Plan regarding the 650,000 share increase.
- Monitor the trend in average billing rates and utilization for full-time billable consultants given the reported decrease in demand.
- Assess the sustainability of the increased demand for document review services driving full-time equivalent revenue growth.