Huron Consulting Group Inc. (HURN, Financial) filed Quarterly Report for the period ended 2010-09-30.
Huron Consulting Group Inc. has a market cap of $442.2 million; its shares were traded at around $20.19 with a P/E ratio of 9.4 and P/S ratio of 0.7. Huron Consulting Group Inc. had an annual average earning growth of 21.6% over the past 5 years.HURN is in the portfolios of Michael Price of MFP Investors LLC, Ron Baron of Baron Funds, Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC.
In fixed-fee billing arrangements, we agree to a pre-established fee in exchange for a pre-determined set of professional services. We set the fees based on our estimates of the costs and timing for completing the engagements. It is the clients expectation in these engagements that the pre-established fee will not be exceeded except in mutually agreed upon circumstances. We recognize revenues under fixed-fee billing arrangements using a percentage-of-completion approach, which is based on our estimates of work completed to-date versus the total services to be provided under the engagement. Revenue from fixed-fee engagements represented approximately 40.6% and 35.5% in the three months ended September 30, 2010 and 2009, respectively, and 37.5% and 38.4% in the nine months ended September 30, 2010 and 2009, respectively.
In performance-based fee billing arrangements, fees are tied to the attainment of contractually defined objectives. We enter into performance-based engagements in essentially two forms. First, we generally earn fees that are directly related to the savings formally acknowledged by the client as a result of adopting our recommendations for improving cost effectiveness in the procurement area. Second, we have performance-based engagements in which we earn a success fee when and if certain pre-defined outcomes occur. Often this type of success fee supplements time-and-expense or fixed-fee engagements. We do not recognize revenues under performance-based billing arrangements until all related performance criteria are met. Performance-based fee revenues represented 11.1% and 18.9% of our revenues in the three months ended September 30, 2010 and 2009, respectively, and 11.3% and 14.8% in the nine months ended September 30, 2010 and 2009, respectively. Performance-based fee engagements may cause significant variations in quarterly revenues and operating results due to the timing of achieving the performance-based criteria.
We also generate revenues from licensing our proprietary software to clients and from providing related training and support during the term of the consulting engagement. Revenues from software licenses are recognized ratably over the term of the related consulting services contract. Thereafter, clients pay an annual fee for software support and maintenance. Annual support and maintenance fee revenue is recognized ratably over the support period, which is generally one year. These fees are billed in advance and included in deferred revenues until recognized. Support and maintenance revenues represented 1.8% and 1.5% of our revenues in three months ended September 30, 2010 and 2009, respectively, and 2.0% and 1.6% in the nine months ended September 30, 2010 and 2009, respectively.
Based on the result of the first step of the goodwill impairment analysis, we determined that the fair values of our Health and Education Consulting, Legal Consulting, and Financial Consulting reporting units exceeded their carrying values by 33.5%, 71.6%, and 8.1%, respectively. Since the fair value of all reporting units exceeded their carrying values, the second step of the goodwill impairment test was not necessary. Although the fair value of the Financial Consulting reporting unit exceeded its carrying value by only 8.1%, we do not feel this reporting unit is near impairment in the foreseeable future due to managements conservative estimates and assumptions made in conjunction with this impairment analysis, as well as managements current evaluation of potential strategic initiatives.
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Huron Consulting Group Inc. has a market cap of $442.2 million; its shares were traded at around $20.19 with a P/E ratio of 9.4 and P/S ratio of 0.7. Huron Consulting Group Inc. had an annual average earning growth of 21.6% over the past 5 years.HURN is in the portfolios of Michael Price of MFP Investors LLC, Ron Baron of Baron Funds, Bruce Kovner of Caxton Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
engagements represented 46.5% and 44.1% of our revenues in the three months ended September 30, 2010 and 2009, respectively, and 49.2% and 45.2% in the nine months ended September 30, 2010 and 2009, respectively.In fixed-fee billing arrangements, we agree to a pre-established fee in exchange for a pre-determined set of professional services. We set the fees based on our estimates of the costs and timing for completing the engagements. It is the clients expectation in these engagements that the pre-established fee will not be exceeded except in mutually agreed upon circumstances. We recognize revenues under fixed-fee billing arrangements using a percentage-of-completion approach, which is based on our estimates of work completed to-date versus the total services to be provided under the engagement. Revenue from fixed-fee engagements represented approximately 40.6% and 35.5% in the three months ended September 30, 2010 and 2009, respectively, and 37.5% and 38.4% in the nine months ended September 30, 2010 and 2009, respectively.
In performance-based fee billing arrangements, fees are tied to the attainment of contractually defined objectives. We enter into performance-based engagements in essentially two forms. First, we generally earn fees that are directly related to the savings formally acknowledged by the client as a result of adopting our recommendations for improving cost effectiveness in the procurement area. Second, we have performance-based engagements in which we earn a success fee when and if certain pre-defined outcomes occur. Often this type of success fee supplements time-and-expense or fixed-fee engagements. We do not recognize revenues under performance-based billing arrangements until all related performance criteria are met. Performance-based fee revenues represented 11.1% and 18.9% of our revenues in the three months ended September 30, 2010 and 2009, respectively, and 11.3% and 14.8% in the nine months ended September 30, 2010 and 2009, respectively. Performance-based fee engagements may cause significant variations in quarterly revenues and operating results due to the timing of achieving the performance-based criteria.
We also generate revenues from licensing our proprietary software to clients and from providing related training and support during the term of the consulting engagement. Revenues from software licenses are recognized ratably over the term of the related consulting services contract. Thereafter, clients pay an annual fee for software support and maintenance. Annual support and maintenance fee revenue is recognized ratably over the support period, which is generally one year. These fees are billed in advance and included in deferred revenues until recognized. Support and maintenance revenues represented 1.8% and 1.5% of our revenues in three months ended September 30, 2010 and 2009, respectively, and 2.0% and 1.6% in the nine months ended September 30, 2010 and 2009, respectively.
Based on the result of the first step of the goodwill impairment analysis, we determined that the fair values of our Health and Education Consulting, Legal Consulting, and Financial Consulting reporting units exceeded their carrying values by 33.5%, 71.6%, and 8.1%, respectively. Since the fair value of all reporting units exceeded their carrying values, the second step of the goodwill impairment test was not necessary. Although the fair value of the Financial Consulting reporting unit exceeded its carrying value by only 8.1%, we do not feel this reporting unit is near impairment in the foreseeable future due to managements conservative estimates and assumptions made in conjunction with this impairment analysis, as well as managements current evaluation of potential strategic initiatives.
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