HURN Amends Its Credit Facility

Analysts at William Blair & Co maintain their "market perform" rating on Huron Consulting Group Inc HURN, while reducing their estimates for the company. According to William Blair & Co, “Huron Consulting filed an 8-K yesterday afternoon with some amendments to the terms of its credit facility. The amendments were primarily meant to exclude some incremental legal costs in the calculation of EBITDA under the agreement.” “We believe these amendments were necessary because legal expenses (net of recoveries from the company’s insurance company) are running higher than expected, due to the ongoing investigation by the SEC, a previously disclosed legal settlement, and some disputes with the company’s insurance company about what legal costs they will cover. Given these higher-than-expected legal expenses, we believe that the company needed these amendments to stay in line with its covenants under the credit facility for the second quarter. We believe the main implications of this amendment are that: 1) GAAP operating expenses will be higher than expected during the second quarter, due to higher-thanexpected legal costs (perhaps by a couple million dollars), and 2) interest expense could be slightly higher than we had previously assumed,” the analysts say. William Blair mentions, “Shares of Huron Consulting have been weak lately. We do not believe that the share price weakness was due to anticipation of this amendment (since most investors in the company are looking past these legal challenges), but this reminder of the company’s debtheavy balance sheet and the ongoing SEC investigation probably won’t help matters much.” William Blair has lowered its EPS estimates for 2010 by $0.06 per share. More Analyst Ratings here