Huron Consulting Group Inc. - Form 8-K Summary
Business Context and Reporting Period
This Form 8-K, dated November 12, 2010, serves as a Regulation FD disclosure to correct previously reported operating metrics for the Financial Consulting segment and the total Company. The corrections apply to the three and nine months ended September 30, 2009, and the corresponding periods in 2010. The filing also references supplementary financial information excluding discontinued operations as of September 30, 2010.
Key Financial Metrics and Corrections
Total revenues for the Financial Consulting segment and the total Company remain unchanged. However, the mix of revenue attributable to full-time billable consultants versus full-time equivalents was adjusted, resulting in revised operating metrics.
| Metric | Period | Segment | Previously Reported | Revised |
|---|---|---|---|---|
| Avg. Billing Rate (per hour) | 3 Months Ended Sep 30, 2009 | Financial Consulting | $329 | $324 |
| Avg. Billing Rate (per hour) | 3 Months Ended Sep 30, 2009 | Total Company | $291 | $249 |
| Revenue per Full-Time Billable Consultant ($000s) | 3 Months Ended Sep 30, 2009 | Financial Consulting | $133 | $129 |
| Revenue per Full-Time Billable Consultant ($000s) | 3 Months Ended Sep 30, 2009 | Total Company | $101 | $90 |
| Revenue per Full-Time Equivalent ($000s) | 3 Months Ended Sep 30, 2009 | Financial Consulting | $71 | $68 |
| Revenue per Full-Time Equivalent ($000s) | 3 Months Ended Sep 30, 2009 | Total Company | $45 | $49 |
| Avg. Billing Rate (per hour) | 9 Months Ended Sep 30, 2009 | Financial Consulting | $309 | $308 |
| Avg. Billing Rate (per hour) | 9 Months Ended Sep 30, 2009 | Total Company | $266 | $243 |
| Revenue per Full-Time Billable Consultant ($000s) | 9 Months Ended Sep 30, 2009 | Financial Consulting | $366 | $377 |
| Revenue per Full-Time Billable Consultant ($000s) | 9 Months Ended Sep 30, 2009 | Total Company | $280 | $250 |
| Revenue per Full-Time Equivalent ($000s) | 9 Months Ended Sep 30, 2009 | Financial Consulting | $193 | $204 |
| Revenue per Full-Time Equivalent ($000s) | 9 Months Ended Sep 30, 2009 | Total Company | $127 | $147 |
Material Changes and Revenue Analysis
The filing provides corrected commentary on revenue variances between 2009 and 2010:
- Three Months Ended Sep 30, 2010 vs. 2009: Total Company revenues decreased by $3.6 million. This consisted of a $16.2 million decrease in full-time billable consultant revenue (due to decreased demand and economic weakness) partially offset by a $12.6 million increase in full-time equivalent revenue (due to increased demand for variable consultants). Financial Consulting segment revenues decreased by $1.5 million.
- Nine Months Ended Sep 30, 2010 vs. 2009: Total Company revenues decreased by $8.8 million. This consisted of a $51.3 million decrease in full-time billable consultant revenue partially offset by a $42.5 million increase in full-time equivalent revenue. Financial Consulting segment revenues increased by $3.3 million, driven by a $5.3 million increase in full-time equivalent revenue offset by a $2.0 million decrease in full-time billable consultant revenue.
Outlook, Risks, and Management Commentary
Management attributes the decline in full-time billable consultant revenue to a weakened economy, decreased discretionary spending by clients, and delayed decisions on new engagements. Conversely, the increase in full-time equivalent revenue is attributed to increased demand for variable, on-demand consultants across all segments. The filing does not provide specific forward-looking guidance or new risk factors beyond the economic conditions cited.
Investor Verification Checklist
- Verify the corrected operating metrics (billing rates and revenue per consultant) for the 2009 periods against the revised figures provided in Exhibit 99.1.
- Confirm the distinction between revenue generated by full-time billable consultants versus full-time equivalents in future reporting periods.
- Review the supplementary financial information regarding discontinued operations as of September 30, 2010.
- Note that total revenue figures remain unchanged; only the attribution mix and derived metrics were corrected.