Good afternoon, ladies and gentlemen. And welcome to Huron Consulting Group webcast to discuss Financial Results for the First Quarter 2018. At this time, all participants are in a listen only mode. Later we will conduct a question-and-answer session for conference call participants, and instructions will follow at that time. As a reminder, this conference call is being recorded. Before we begin, I would like to point all of you to the disclosure at the end of the Company's news release for information about any forward-looking statements that may be made or discussed on this call. The news release is posted on Huron's Web site. Please review the information, along with the filings with the SEC, for a disclosure of factors that may impact subjects discussed in this afternoon's webcast. The Company will be discussing one or more non-GAAP financial measures. Please look at the earnings release and on Huron's Web site for all of the disclosures required by the SEC, including reconciliation to the most comparable GAAP numbers. And now, I would like to turn the call over to Jim Roth, Chief Executive Officer and President of Huron Consulting Group. Mr. Roth, please go ahead.

Thank you. Good afternoon, and welcome to Huron Consulting Group's first quarter 2018 earnings call. With me today is John Kelly, our Chief Financial Officer and Mark Hussey, our Chief Operating Officer. Led by strong growth in our Education segment, our first quarter results were consistent with our full year expectations. And today, we affirm our full year guidance. The Healthcare segment continued to make progress in its operational turnaround and the Business Advisory segment reported solid revenue growth compared to prior year results. I will now provide a brief overview of the performance for each segment, and then John will add color to the financials. Let me begin with Healthcare. During the first quarter, the Healthcare segment revenues declined 9% compared to the prior year quarter. The quarter-over-quarter decline was primarily attributable to the roll-off of a larger engagement in the first quarter of 2017 where we benefited from a significant contingent fee, and anticipated softness in our Studer Group business, largely stemming from the impact of the mid-year cancellations in that business in 2017. During Q1, we continued to see success in the operational turnaround in this business. Our unified go-to-market approach and modified delivery models have been well received in the market, particularly at a time when margin pressures within the provider industry are under significant and growing pressure. We are now through the period of tougher comparisons in the Healthcare segment, and our outlook reflects a more balanced portfolio of engagement sizes and service lines across a larger client base. The healthcare industry continues to face significant disruptions, including a rapidly changing vertical realignment of the industry, adding to the challenges providers already face in their complicated business models. As these changes evolve, we are well positioned to help our clients architect transformative strategies to compete…

Thank you, Jim and good afternoon everyone. Before I begin, please note that I will be discussing non-GAAP financial measures, such as EBITDA, adjusted EBITDA, adjusted net income, adjusted EPS, and free cash flow. Our press release, 10-Q and investor relations page on the Huron Web site have reconciliations of these non-GAAP measures to the most comparable GAAP measures, along with a discussion of why management uses these non-GAAP measures and why management believes they provide useful information to investors regarding our financial condition and operating results. Also, unless otherwise stated, my comments today are all on a continuing operations basis. Now, let me walk you through some of the key financial results for the quarter. Revenues for the first quarter of 2018 increased 2.6% to $193.7 million compared to $188.8 million in the same quarter of 2017. First quarter 2018 revenues included $6.4 million incremental revenues due to the full quarter impact of our acquisition of Innosight, which was completed in March of 2017. Net loss was $3.2 million or $0.15 per diluted share in the first quarter of 2018 compared to net income of $5.2 million or $0.24 per diluted share in the same quarter last year. As Jim mentioned, the decline in net income over the prior year period reflects planned increase in salaries and related expenses for our revenue-generating employees, including an increase in bonus funding, which is based on our current full year expectations; the impact of two practice leadership meetings, which occurred during the first quarter of 2018; and the impact in the first quarter of 2017 of a significant contingency in our healthcare segment for a large project that was substantially completed at the end of 2016. Our effective income tax rate in first quarter of 2018 was negative 14.7% compared to 52.7%…

Thank you [Operator Instructions]. Our first question comes from line of Tim McHugh of William Blair. Your line is open.

Just want to ask for some expenses. Campus of the seasonality of expenses and how significant were the cost for these leadership meetings?

Tim, when you look at the seasonality of the expenses that we called out in our comments. Those practice meetings were low-single-digit million dollars and expense. They're probably also related cost. I am just having our people out of the market for those couple of years. In addition to that, we do have the fringe of reset at the beginning of the year. We're just significant in our business, more people business and so the reset of FICA and 401K. There is also a several million dollar headwind. And I’d say the other big piece kind of looking to just seasonality between quarter really has to bonus accruals in that. We’re accruing based on our full year expectations for the year, which means we’re taking a little bit heavier bonus expense during the first quarter.

So I guess, on that last part, see don’t -- it’s not ratable kind of you’re not accruing kind of evenly across the year?

We are accruing evenly, but we’re basically on a full year expectation, which we expect to have higher EBITDA quarters in the later three quarters of the year. So as a result of that, we’re recording a greater bonus expense during the first quarter despite those seasonal items than we would. I mean we were just doing it quarter-by-quarter.

Okay. You’re saying relative to the EBITDA, okay. And the leadership means, is that low-single-digits to millions per meeting, so multiple by two?

In total.

In total between that, okay. In the FICA, expenses, did you say how much or kind of the broader fringe costs early in the year?

It's low to mid single digit million as how we describe the impact during the first quarter relative to other quarters.

Can you help, I think just a mass people run. I mean you need kind of significant lower expense than that even if I just take the midpoint of the guidance range for the next three quarters. The implied numbers much lower than what you had in Q1, I guess, I’m trying to reconcile why expenses will be lower than in the first quarter going forward in the next few quarters, particularly if you’re hiring still?

I think another factor that I would cite in as you know, if you kind of -- if you look at the Business Advisory margins that we had during the first quarter. Those were 15%, so that’s probably another contributing factor when you look at the full year. As Jim mentioned in his comments, Innosight started slower in January and then ramped up really in line with our expectations by March, but they’re still was a Q1 impact related to the fact that they just start slow in January though we don’t have any full year concerns with regard to their margin expectations. And then really with the legacy Business Advisory segments, their plan does include the expectations that will have success fees throughout the course of the year and it was really a pretty life like success of the quarter. So I’d say those factors, if you look into the Business Advisory segment and 16% margin that we had during the first quarter versus the expectation that we set in the call of 22% to 23%, I think that’s another factor. Just kind of get the headwind across the segments of the fringes, you've got the SG&A items related to the practice meetings which is in the low-single-digit millions. And then with BA, we do expect to see improvement there based on those two factors.

And then just two follow ups, you mentioned Studer I guess still some impact of the midyear things from last year. I guess what's the growth rate on that sort of business now? And then can you just talk to us about this size of the impact of the divestiture in Middle East?

So, I’ll start with the Middle East and then hand it over to Mark who can comment on Studer Group growth rates for the year. From Middle East perspective, we don’t expect to have any impact on a revenue adjusted EBITDA or adjusted EPS guidance for the year. Our internal plans would have been in sort of the mid-single digit million range but we hedged that back for guidance purposes. So it doesn’t really have any impact on our guide, and from a profitability perspective that would be a very small amount. And again it was something that we would hedge back in the guidance that we provided.

Tim, and then Jim on Studer Group, this is Mark. I’d expect it to be flat to slight down for the full year based on cancellations. From last year that are partially offset by some higher transactional revenue from this year, and we started to see more opportunities across the full Healthcare practice for things that were traditionally Studer Group that we're finding their ways into performance improvement engagement. So, we are leveraging a broader base and those are some of the offsets to why we are seeing some -- we would have otherwise seeing declines in 2018.

[Operator Instructions] Our next question is from Bill Sutherland of Benchmark. Your line is open.

Just following up on the Studer question there, so simple math would suggest you will have up comps in the back half. Is that fair?

From a Studer Group perspective?

Yes.

Yes, that’s correct because we are selling, Bill, we are selling into the year. I mean you start with the total contract values reflecting the cancellations, and there is still business efforts and selling that's going on. So, that is correct.

Right, and some of the impact of the cancellations from last year didn't really fully hit the run rate for the third or fourth quarters. So I said the second discourages just looking group isolation, second quarter is probably still a more challenging comp than what you get as the third quarter and fourth quarter on more of apples-to-apples basis are not playing those cancellations.

And then when I look at the first quarter I guess, John. It feels to me like was the performance fees a little bit disproportionately higher open to the, if those purely flat quarter-to-quarter. I mean if you divided 30/4. That offset looks to be some pressure on utilization or is the high 20s, kind of what where utilization, [indiscernible] no, that’s my problem, I’m sorry I forget the red line. Your utilization was better than I expected. And you have the performance fees over solidify your margin would have been a little better than 27.

Yes, so if you are reconciling from that 27 to the 32 to 33, that’s embedded in the full-year guide. For Healthcare, it really does come down to the cost of the practice meeting which is a segment wide leadership meeting that we had during the first quarter. On the seasonality of fringes as it relates to that segment and then the fact that from a bonus perspective, we accrued to what our full year expectations was, which essentially means we accrued more bonus during the first quarter than we otherwise would have just looking at the first quarter in isolation. So, those are factors that kind of bridge that 5% gap.

Yes, the thing I would add to that Bill is that I think the bill rates were a little bit low in the quarter. And so while our utilization was a little bit -- it's been good. We are pleased with that. But the mix of that utilization has little bit more assessment activity as we’ve seen better pipeline this year. And so, in some respects we expect that bill rate to be another factor that will help improve margins in the future quarters.

I was wondering, lies the fact that you are enhancing the comp packages for I am not -- well first off, are you enhancing it across the board or is it targeted?

It’s Jim. They are mostly targeted. I mean we don’t have in for specific individuals as much as it is we are trying to take the overall package but the overall package ends up getting targeted. So it’s not a pro rata thing across everybody. We look at the bonuses and try to make sure that they are going to be applied in ways or way the people are contributing most to the value of that.

Maybe Bill clarify your question a little bit, make sure -- let’s make sure we answered what you were asking.

Well, it does -- that does, I mean Jim again it’s the first part. The second part of it is, do you think you are effectively addressing churns obviously one thing you want to do what you can with the compensation?

Yes, I got it. So just to be clear the compensation increases were all normal. There was nothing unusual about them. But I would say generally speaking when you look at turnover what we’ve experienced so far this year has been well below it was last year and that’s at every signal level up to including our managing director. So we have been pleased with how that has actually started out the year.

And, it’s Jim, as part of that, I think it’s important to point out that we have since the beginning of January when we rolled out our strategic plan we have spent a lot of time with all the practices, I am talking about, what it means, where it can take us and how see it generally growth for the company. And I think that there has been a lot of excitement and enthusiasm around that and we feel good about the way we’re progressing against that plan and actually best part of the reason is why you see the turnover levels to where they are right now.

And finally from me, how are you finding the selling environment in Healthcare these days? That’s a broad question maybe you won’t talk about it but a little bit by units, sales cycle?

Again I think, as Jim described, the general for the industry right now has margin pressure in some degree of uncertainty. And I think in that context there’s definitely been a need for health systems to think differently about their cost structures and to find ways to improve their margins. So in that backdrop what we’ve seen is again smaller engagements that have led to follow on work as we've gotten started. We have found to competitive environment is healthy, but I think we’re winning at least our fair share of the opportunities. I think the balance across the portfolio has been good as well. So I think we alluded to some of the progress that we’ve made on the strategy side of our practice working with closely within a site. And I would say to that technology aspects of our business are growing above our expectations candidly, they have been a nice help to us. Our performance improvement business is in line with our expectations with increase with how that’s progressing. So generally speaking, I think we have a pretty healthy environment from selling right down.

Yes. This is Jim. I would add to that, is that, I mean just kind of financial perspective. I think one of the most common themes we hear is that you certainly have reimbursements that are going up at our rate that’s slower than the expenses are going up particularly in a tight market for nursing and physicians. So that’s been a problem in terms of the margins. And then I think more broadly, you still have concerns over -- the real uncertainty is to, the expense to which the vertical integration is going to impact operations for traditional provider market. And I think that something that’s rollout in time. There are a lot of work that Mark talking about in terms of strategy work we’re doing, it’s really helping organizations begin to through, what are some of the potential applications and how should they think about responding to those recognizing that the piece and depth of the vertical, the industry consolidation, they extent to which other interest are getting to the market right now is all very uncertain. And so you put that all together, it’s a good market for us to selling too. And I think given the fact that we have dramatically transform for Healthcare business away from what historically had just been performance improvement revenue cycle. And now providing so many more capabilities around, analytics around, strategy around, technology in addition to our core offerings, we show really good about our doing continue to sell into this really rapidly changing market.

Our next question is from Tobey Sommer of SunTrust. Your line is open.

Apologies, if I missed this earlier in the call. But with respect to Healthcare and assessment activity that you described is kind of dampening the bill rates. Is that in performance improvement area? Or is there elevated the assessment activity in other service line as well within Healthcare?

Typically, we’ll have that predominantly in the performance improvement area because what you’re doing is going in and looking at financial opportunity to generate incremental ROI, and those are going to tie very well into the performance improvement part of that our business.

I think over the last couple of years, Mark, correct me if I’m wrong. But over the last couple of years. I think the degree, the manifest assessment effort that we have is last in part because we change to why we do assess this. But in part, we had a much higher degree of contingent agreements the upfront assessment way and more critical. When we have lower level, those assessments become less critical.

And how are you feeling about the demand environment in Healthcare, I feel like in the last summer, maybe even in the floor, we were on a call like this one talking about a pick-up in demand, but the one that you weren’t willing to endorse is necessarily having legs because of the inconsistencies in the market in the prior years. How do you feel about it today?

Tobey, this is Jim. I think we made the comments back in the fall that we were encouraged by the way the market was picking up and not only the level of demand but the kind of demand, which we think was well matched to the way that we have transformed that business. And I think that remains and I think to some extent, it maybe even gotten a little bit better. The issue that we have had and the reason that we said that we wanted to be cautious about extrapolating that too far was that, as we said on a number of occasions, the mix of our projects now instead of being a small number of large jobs, there is a much larger number of smaller jobs and as a result it just gives us a little bit less visibility. It's not that different from what we have historically seen in higher education so it's not like that, that’s just only bad thing it's just a different thing for us. And so therefore given all the changes that are taking place in Healthcare, given our lower visibility particularly compared to the way our visibility it used to be we just are taking a cautious approach. At this stage we feel good about the way the market is progressing. We feel good that it's going to generate solid demand for us. We just want to be cautious about extrapolating transitory a couple of quarters into our belt.

With respect to the education business, I was wondering if you could comment about the underlying drivers that are impacting your customers and triggering them to engage you because I have seen kind of a flurry of reports around involvement being challenged among -- at the college level whether it's international or different ethnic groups. And I’m curious, if you could comment on that one in particular as well as other ones that are influencing your business?

Well, Tobey that certainly is one of the issues that’s impacting higher rate. As everyone red that there are demographic challenges that are affecting certain kinds of college and the universities, in some cases those demographic issues are kind of more geographically based. They affect tuition dependent places more so than they do in non-tuition dependent places. The impact of technology has had a -- is having a solid impact in terms of both the cost and kind of students that universities are attracting a lot more focused on the adult market the post 21 market. And you have got varying levels of state support and you also have a situation that it's really hard to predict how you are going to grow revenues in most of higher education, yet they have an expense base that’s clearly going up and in some cases still higher than inflation. And so you put it all together and it’s a very difficult market and I think the clouds we have been building for a while I think we are seeing in the last certainly last 12 months. We are doing a lot of work in the student area. Some of that is part of our cloud services that we are offering. Some of it just part of the overall strategy work that we do in the student area but is certainly a part of their market of the higher education market that’s drawing a lot of attention right now and we happen to be very well primed to do that. I think more broadly we continue to see a lot more strategic projects than we've historically seen because of so much uncertainty about the overall business model and higher education. So you put it all together, we feel pretty good about how we are positioned and our ability to continue to sustain organic growth in this area.

When you say strategic, do you mean larger projects?

Well, there I didn’t necessarily mean it in terms of size. Some are larger than others certainly, but I think what I really meant to say was that they were -- there's some fundamental ways of having to look at their business model differently than they ever had before. And so sometimes the college and universities would like to have a strategic review of what they are doing or how they should proceed in the future. And so we are doing more of that and some of them are decent sized.

Okay, last question from me. Your technology businesses and business advisors, that’s been over the period of years, how do you feel that you are doing the cross-selling those to your Healthcare and institution customers and where are we in that process?

Tobey just when you said where are we in that process in terms of what, just so I can answer the question correctly?

In other words, if you are -- if you had some given assessment as to how far that has come and whether there is more to be done or you hit a decent -- or you’ve accomplished much of the cross selling you would expect?

Well, I think that’s an easy one for me to answer. I think we have in the last two years, we have dramatically -- particularly our ES&A practice has really only what three years old or so and when we started we had the initial acquisition back in late 2014 and we had another one in 2016 and combined it has really been a very solid performer for us. They did very little in Healthcare and Education prior to that point in time. And we now have a much larger presence in Healthcare and Education. I mentioned in my talk that for example we do a lot of work in sales force and -- but there’s also just other types of broader business model, financial planning work that we are doing in Healthcare and Education through the ES&A practice. So I have very high hopes that that will continue to expand. And I think again it provides -- we keep talking about this competitive advantage and I know it sounds like an any phrase but the reality we’re trying to say is that when we have those technical competencies into a company like ours where we have such deep industry expertise whether it be health, education, it could be life sciences, it could be financial services, in those areas in particular we can go in with strong technology competencies and apply our industry expertise and our deep relationships that we have in those industries. When you put all that altogether, it gives us a real good opportunity to continue to collaborate more. So I’ve got a very high expectation that that will continue in a material way.

Thank you. Our next question is from Kevin Steinke of Barrington Research. Your line is open.

Hi, just following up on the discussion there about the ES&A practice within Business Advisory. It seemed to be a little bit more cautioned on the last call going into 2018 about growth in that practice. You had the impairment charge but it seems like it’s off to a pretty solid start. I think you mentioned low double-digit growth in the first quarter here. So just how is that progressing relative to your expectations and how do you feel about the outlook for the remainder of the year within that practice?

This is John. So we feel good about the way to start of the year. They had some really nice momentum of the market. Our pipeline is looking good and there is a lot of good opportunities out there that we’re pursuing right now. We’ve had some really nice wins during the quarter. That double-digit growth that we enter in the first quarter, we’re not calling that in yet. And say from our perspective are going to kind of stake with the guidance that we had out there more of a mid-single-digit perspective for the year. So in that regard, our expectation for the next several quarters is that will moderate little bit over the past year. But certainly we’re hopeful that there’s offside there and that we’ll be able to can execute and drive results that are above those initial guidance expectations that we put out.

And the practice wide meetings, I think you said there is one in education, one in healthcare. I think to the extent possible. Could you just talk a little bit more about what the focus of those meetings? And any takeaways that came out of them?

Yes. So this is Jim. Well, so couple of comments. The easiest thing is not to do any of those meetings and we just stick to doing client work and the reality is the best thing that happens in those meetings is that you get a bunch of people in the practice that otherwise that are traveling every week, every week all across the country different clients and a lot of people don’t see each other. They don’t, they interact with the people but this gives us the one opportunity to really get people together to talk about the strategy that we have reach the practices to have them meet with each other and find ways to kind of collaborate together. And if really, if provides an in valuable way for us to be unified the practice and get them all looking at the future, the rest of the year in the same way. We don’t necessary do these every 12 months, I’d say in average we’ve probably done every 18 months or so and they’re going to be, they’re going to sometimes hit the same quarter, you have to plan since pretty prior in advance. But they are hugely important. Even though, they end up being expensive to not do them come I think would be a big mistake, because really, what you do is you wind up the time the culture that you bring that you have or you want to build into the practice. And at the same time, it’s just a unique opportunity for everyone to see and hear the strategy of the same time. And so you put all that together and it really makes a very big difference. I guess last part of thing I’ve mentioned is that, it gives us a chance to kind align our operating and go-to-market strategies and delivery models in way that isn’t just going to email, but it’s actually be in done face-to-face. So I think they’re vitally valuable, I wish, we could actually do them more often, we can’t for obvious fiscal reasons but they are valuable and you talk to people that come out of them and don’t care if your first somebody been notice for 2 weeks or somebody has been for 12 years, they’re really, really important. And I think not to do them would be a big mistake for us. So we have to, we go through them not because we have to but because we think there are valuable thing for company on a go forward basis.

Okay, that’s helpful color. And just, I guess lastly here you mentioned again the five-year strategy in collaboration across practices being a key element of that. Yes, I don’t know, it seems like that’s kind of a driving factor across the firm for you now. I don’t know, if you’re at the point where you can discuss that a little bit more broadly with us or maybe hold off on that for future discussion. But I guess any other color you could add what might be interesting?

I think we are interested in sharing it, I think we are just not quite there yet. We are still -- we knew it was going to be a living breathing plan. It wasn’t just going to be something that we put down and never touched again. In fact, a good part of it has to be the fact that we are going to do some things to pursue some things that are going to come not come to fruition. So we have -- the gist of it is that we have we have -- for each one of the practices and services that we have right now, we have our own estimation as to how much they are likely to grow and the next five years some like in any business are going to tail off in terms of demand. We have contemplated that as well. We also then have reached the practices very things that we are either developing or planned to develop that will generate future growth for us in each of these areas. So when we look at our future plan our future growth expectations they are going to come through mostly organic and other things that will be built by us internally and built organically, but we may have some small tuck-in's along the way but a majority of our plan is always based on an organic focus, and it's also one that I think is going to be what's going to be critical to us is that we not just assuming the same services we have today are going to be the exact same ones that we are going to have five years from now. If we look back over five years ago in 2013 and we look how things have changed for us to expect things not to change again would be I think inappropriate. So, we anticipate just like we tell our clients you got to anticipate changes in the markets we are doing the same thing. That’s what plan is built on. And there will be a point in time and I think I will have more to share with everybody I think we are just not quite there yet. We want to go little bit more underway and work out some of the things that we think we need to be clarify a little bit more, and then I think that point and time we will do it again.

Kevin, I’m going to add just a comment on collaboration. I’d just like to point out that for us collaboration is about speed because when you have teams aligned in the market and they are jointly focused they are aligned in incentives, it's how quickly can you bring value to the client in a way that leverages and differentiates a greater solution because you have complementary offerings. And that’s just a principal that's been in our culture for a while. And I would say that is one that we continue to work on just bringing to a next level of competitive advantage.

I think the other part is around collaboration is that when we have seen success recently, we are at this company even though we are desensitized, we are not a mega firm and I think our ability to collaborate and bring people together in a much more meaningful way when they met each other before when they work together when they are going market together makes a big difference it shows when you are trying to talk with senior leadership about doing some big strategic projects they can tell how well you work together they can tell where your solutions are going to come from. And to us its absolutely key for us to continue to able to capitalize and taking those strong strategic confidences and put them together in a meaningful way and collaborate with our industry experience and knowledge I think is a big part of how we see our strategic plan be achieved. We talk about that all the time internally and it is working very well, not perfectly every time but it looks very well.

Thank you. And that’s all the questions we had for today. I’d like to turn the call back over to Jim Roth for any further remarks.

Thank you for spending time with us this afternoon. We look forward to speaking with you again in July when we announce our second quarter results. Have a good evening.

That concludes today’s conference. Thank you everyone for your participation.