ARLINGTON, Va., May 2, 2012 /PRNewswire/ -- The Corporate
Executive Board Company ("CEB" or the "Company") (NYSE: EXBD) today
announces financial results for the first quarter ended
March 31, 2012. Revenues
increased 13.1% to $128.5 million for
the first quarter of 2012 from $113.6
million for the first quarter of 2011. Income from
continuing operations for the first quarter of 2012 was
$15.6 million, or $0.46 per diluted share, compared to $12.1 million, or $0.35 per diluted share, for the same period of
2011. Adjusted net income was $15.8
million and non-GAAP diluted earnings per share was
$0.47 in the first quarter of 2012
compared to $12.1 million and
$0.35 for the same period of 2011,
respectively.
Contract Value at March 31, 2012
increased 10.3% to $490.2 million
compared to $444.6 million at
March 31, 2011. Wallet
retention rate at March 31, 2012 was
99% compared to 104% at March 31,
2011. Contract Value per member institution increased 1.5% at
March 31, 2012 to $85,535 from $84,296 at March 31,
2011.
"We started the year by delivering steady financial performance
and making further progress against our strategic objectives," said
Thomas Monahan, Chairman and Chief
Executive Officer. "Our teams continued to secure important
relationships, and laid the foundation for additional growth in
2012. We also strengthened our product portfolio with the
previously-announced acquisition of Valtera and the launch of IT
Roadmap Builder, the first offering on our newly-developed
visualization technologies platform. We are on track to
achieve our 2012 outlook."
OUTLOOK FOR 2012
The Company reaffirms its 2012 annual guidance of Revenues of
$535 to $555 million; Non-GAAP
diluted earnings per share of $1.75 to
$2.00; Depreciation and amortization expense of $20 to $22 million; capital expenditures of
$12 to $15 million; and an Adjusted
EBITDA margin of between 23.0% and 24.0%.
QUARTERLY DIVIDEND
The Company today announces that its Board of Directors has
approved a cash dividend on its common stock for the second quarter
of 2012 of $0.175 per share.
The Company will fund its dividend payments with cash on hand
and cash generated from operations. The dividend is payable
on June 29, 2012 to stockholders of
record at the close of business on June 15,
2012.
NON-GAAP FINANCIAL MEASURES
This press release and the accompanying tables, as well as
earnings discussions, includes a discussion of Adjusted EBITDA,
Adjusted net income, and Non-GAAP diluted earnings per share, which
are non-GAAP financial measures provided as a complement to the
results provided in accordance with accounting principles generally
accepted in the United States of
America ("GAAP"). The term "Adjusted EBITDA" refers to
a financial measure that we define as net income before loss from
discontinued operations, net of provision for income taxes;
interest income, net; depreciation and amortization; provision for
income taxes; acquisition related costs; costs associated with exit
activities; restructuring costs; and gain on acquisition. The
term "Adjusted net income" refers to net income before loss from
discontinued operations, net of provision for income taxes and
excludes the after tax effects of acquisition related costs, costs
associated with exit activities, restructuring costs, and gain on
acquisition. "Non-GAAP diluted earnings per share" refers to
diluted earnings per share before the per share effect of loss from
discontinued operations, net of provision for income taxes and
excludes the after tax per share effects of acquisition related
costs, costs associated with exit activities, restructuring costs,
and gain on acquisition.
We believe that Adjusted EBITDA, Adjusted net income, and
Non-GAAP diluted earnings per share are relevant and useful
supplemental information for our investors. We use these
non-GAAP financial measures for internal budgeting and other
managerial purposes, when publicly providing the Company's business
outlook and as a measurement for potential acquisitions. A
limitation associated with Adjusted EBITDA is that it does not
reflect the periodic costs of certain capitalized tangible and
intangible assets used in generating revenues in our business.
Management evaluates the costs of such tangible and intangible
assets through other financial measures such as capital
expenditures. Management compensates for these limitations by also
relying on the comparable GAAP financial measure of Operating
profit, which includes depreciation and amortization.
These non-GAAP measures may be considered in addition to results
prepared in accordance with GAAP, but they should not be considered
a substitute for, or superior to, GAAP results. We intend to
continue to provide these non-GAAP financial measures as part of
our future earnings discussions and, therefore, the inclusion of
these non-GAAP financial measures will provide consistency in our
financial reporting.
A reconciliation of each of these non-GAAP measures to the most
directly comparable GAAP measure is provided below.
|
Three
Months Ended
March
31,
|
|
2012
|
2011
|
Net
income
|
$
15,561
|
$
11,354
|
Loss from
discontinued operations, net of provision for income
taxes
|
-
|
706
|
Income
from continuing operations
|
15,561
|
12,060
|
Interest
income, net
|
(77)
|
(314)
|
Depreciation and amortization
|
5,029
|
4,055
|
Provision
for income taxes
|
10,994
|
8,322
|
Acquisition related costs
|
476
|
-
|
Adjusted
EBITDA
|
$
31,983
|
$
24,123
|
|
|
|
|
Three
Months Ended
March
31,
|
|
2012
|
2011
|
Net
income
|
$
15,561
|
$
11,354
|
Loss from
discontinued operations, net of provision for income
taxes
|
-
|
706
|
Income
from continuing operations
|
15,561
|
12,060
|
Acquisition related costs
|
279
|
-
|
Adjusted
net income
|
$
15,840
|
$
12,060
|
|
|
|
|
|
Three
Months Ended
March
31,
|
|
2012
|
2011
|
Earnings
per diluted share
|
$
0.46
|
$
0.33
|
Loss from
discontinued operations, net of provision for income
taxes
|
-
|
0.02
|
Earnings
per diluted share from continuing operations
|
0.46
|
0.35
|
Acquisition related costs
|
0.01
|
-
|
Non-GAAP
earnings per diluted share
|
$
0.47
|
$
0.35
|
|
|
|
|
With respect to the Company's 2012 annual guidance,
reconciliations of GAAP diluted earnings per share to Non-GAAP
diluted earnings per share, net income to Adjusted net income, and
net income to Adjusted EBITDA as projected for 2012 are not
provided because the Company cannot, without unreasonable effort,
determine the components of net income and GAAP diluted earnings
per share to provide reconciliations for 2012 with certainty at
this time.
INVESTOR DAY
CEB will hold its annual Investor Day for institutional
investors and sell-side analysts at its Waterview headquarters in
Arlington, Virginia on
Thursday, May 17, 2012. At the
Investor Day, members of the Company's senior leadership team will
review the Company's business portfolio, strategy for growth, and
financial performance. The Investor Day is by invitation only
and registration is required. It will also be webcast live
via the Internet on the Company's web site at www.exbd.com and a
replay will be available on our website following the event.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Statements using words such as "estimates," "expects,"
"anticipates," "projects," "plans," "intends," "believes,"
"forecasts" and variations of such words or similar expressions are
intended to identify forward-looking statements. In addition,
statements about anticipated future financial results, such as our
2012 annual guidance, are forward-looking statements. You are
hereby cautioned that these statements are based upon our
expectations at the time we make them and may be affected by
important factors including, among others, the factors set forth
below and in our filings with the U.S. Securities and Exchange
Commission, and consequently, actual operations and results may
differ materially from the results discussed in the forward-looking
statements. Our expectations, beliefs and projections are
expressed in good faith and we believe there is a reasonable basis
for them. Factors that could cause actual results to differ
materially from those indicated by forward-looking statements
include, among others, our dependence on renewals of our
membership-based services, the sale of additional programs to
existing members and our ability to attract new members, our
potential failure to adapt to changing member needs and demands,
our potential inability to attract and retain a significant number
of highly skilled employees, risks associated with the results of
restructuring plans, fluctuations in operating results, our
potential inability to protect our intellectual property rights,
our potential exposure to loss of revenue resulting from our
unconditional service guarantee, exposure to litigation related to
our content, various factors that could affect our estimated income
tax rate or our ability to use our existing deferred tax assets,
changes in estimates or assumptions used to prepare our financial
statements, our potential inability to make, integrate and maintain
acquisitions and investments, the amount and timing of the benefits
expected from acquisitions and investments, and our potential
inability to effectively anticipate, plan for and respond to
changing economic and financial markets conditions, especially in
light of ongoing uncertainty in the worldwide economy and possible
volatility of our stock price. These and other factors are
discussed more fully in the "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and "Risk
Factors" sections of our filings with the U.S. Securities and
Exchange Commission, including, but not limited to, our 2011 Annual
Report on Form 10-K. The forward-looking statements in this press
release are made as of May 2, 2012,
and we undertake no obligation to update any forward-looking
statements, whether as a result of new information, future events,
or otherwise.
ABOUT THE CORPORATE EXECUTIVE BOARD COMPANY
By identifying and building on the proven best practices of the
world's best companies, CEB helps senior executives and their teams
drive corporate performance. CEB offers comprehensive data
analysis, research and advisory services that align to executive
leadership roles and key recurring decisions. CEB tools, insights,
and analysis empower member companies to focus efforts, move
quickly, and address emerging and enduring business challenges with
confidence. CEB's client and member network includes 85
percent of the Fortune 500, 50 percent of the Dow Jones Asian
Titans, and 70 percent of the FTSE 100. It spans more than 50
countries, 5,700 individual organizations, and 225,000 business
professionals. For more information, visit www.exbd.com.
THE
CORPORATE EXECUTIVE BOARD COMPANY
Financial Highlights and Other Operating Statistics
(Unaudited)
|
|
|
|
|
|
|
|
Selected
|
|
Three
Months Ended
|
|
Percentage
|
|
March
31,
|
|
Changes
|
|
2012
|
|
2011
|
Financial Highlights:
|
|
|
|
|
|
(In
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
13.1%
|
|
$
128,467
|
|
$
113,623
|
Income
from continuing operations
|
29.0%
|
|
$
15,561
|
|
$
12,060
|
Net
income
|
37.1%
|
|
$
15,561
|
|
$
11,354
|
Adjusted
net income
|
31.3%
|
|
$
15,840
|
|
$
12,060
|
Earnings
per diluted share from continuing operations
|
31.4%
|
|
$
0.46
|
|
$
0.35
|
Non-GAAP
earnings per diluted share
|
34.3%
|
|
$
0.47
|
|
$
0.35
|
|
|
|
|
|
|
Other
Operating Statistics:
|
|
|
|
|
|
Contract
Value (in thousands)*
|
10.3%
|
|
$
490,213
|
|
$
444,636
|
Member
institutions
|
8.6%
|
|
5,731
|
|
5,275
|
Contract
Value per member institution
|
1.5%
|
|
$
85,535
|
|
$
84,296
|
Wallet
retention rate**
|
|
|
99%
|
|
104%
|
|
|
|
|
|
|
* We
define "Contract Value," at the end of the quarter, as the
aggregate annualized revenue attributed to all agreements in effect
on such date, without regard to the remaining duration of any such
agreement.
** We
define "Wallet retention rate," at the end of the quarter, as the
total current year Contract Value from prior year members as a
percentage of the total prior year Contract Value.
|
THE
CORPORATE EXECUTIVE BOARD COMPANY
Statements of Operations
(In thousands, except per share data)
|
|
|
Three
Months Ended
|
|
March
31,
|
|
2012
|
|
2011
|
|
(Unaudited)
|
Revenues
|
$
128,467
|
|
$
113,623
|
|
|
|
|
Cost and
expenses:
|
|
Cost of services
|
43,651
|
|
39,786
|
Member relations and
marketing
|
38,178
|
|
34,944
|
General and
administrative
|
16,464
|
|
15,961
|
Depreciation and
amortization
|
5,029
|
|
4,055
|
Total costs and
expenses
|
103,322
|
|
94,746
|
|
|
|
|
Operating
profit
|
25,145
|
|
18,877
|
Other
income, net(1)
|
1,410
|
|
1,505
|
Income
from continuing operations before provision for income
taxes
|
26,555
|
|
20,382
|
Provision
for income taxes
|
10,994
|
|
8,322
|
Income
from continuing operations
|
15,561
|
|
12,060
|
Loss from
discontinued operations, net of provision for income
taxes
|
-
|
|
(706)
|
Net
income
|
$
15,561
|
|
$
11,354
|
|
|
|
|
Basic
earnings (loss) per share
|
$
0.47
|
|
$
0.33
|
Continuing operations
|
0.47
|
|
0.35
|
Discontinued operations
|
$
-
|
|
$
(0.02)
|
|
|
|
|
Diluted
earnings (loss) per share
|
$
0.46
|
|
$
0.33
|
Continuing operations
|
0.46
|
|
0.35
|
Discontinued operations
|
$
-
|
|
$
(0.02)
|
|
|
|
|
Weighted
average shares outstanding
|
|
Basic
|
33,327
|
|
34,351
|
Diluted
|
33,661
|
|
34,746
|
|
|
|
|
Percentages of Revenues
|
|
Cost of
services
|
34.0%
|
|
35.0%
|
Member
relations and marketing
|
29.7%
|
|
30.8%
|
General
and administrative
|
12.8%
|
|
14.0%
|
Depreciation and amortization
|
3.9%
|
|
3.6%
|
Operating
profit
|
19.6%
|
|
16.6%
|
Adjusted
EBITDA(2)
|
24.9%
|
|
21.2%
|
|
|
|
|
(1) Other
income, net for the three months ended March 31, 2012 includes $0.1
million of interest income, a $1.1 million increase in the fair
value of deferred compensation plan assets, and a $0.2 million
foreign currency gain. Other income, net for the three months ended
March 31, 2011 includes $0.3 million of interest income, a $0.6
million increase in the fair value of deferred compensation plan
assets, and a $0.6 million foreign currency gain.
(2) See
"NON-GAAP Financial Measures" for further explanation.
|
THE
CORPORATE EXECUTIVE BOARD COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
|
|
|
|
|
|
Mar.
31, 2012
|
|
Dec. 31,
2011
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
208,699
|
|
$
133,429
|
Marketable securities
|
3,748
|
|
3,794
|
Membership fees receivable,
net
|
95,628
|
|
154,255
|
Deferred income taxes,
net
|
17,255
|
|
17,844
|
Deferred incentive
compensation
|
18,839
|
|
17,330
|
Prepaid expenses and other current
assets
|
14,813
|
|
21,624
|
Total
current assets
|
358,982
|
|
348,276
|
|
|
|
|
Deferred
income taxes, net
|
17,360
|
|
20,490
|
Marketable
securities
|
6,670
|
|
6,722
|
Property
and equipment, net
|
82,337
|
|
80,981
|
Goodwill
|
40,287
|
|
29,492
|
Intangible
assets, net
|
21,166
|
|
13,581
|
Other
non-current assets
|
35,613
|
|
34,150
|
Total
assets
|
$
562,415
|
|
$
533,692
|
|
|
|
|
Liabilities and stockholders'
equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and accrued
liabilities
|
$
35,723
|
|
$
46,067
|
Accrued incentive
compensation
|
41,482
|
|
37,884
|
Deferred revenues
|
308,749
|
|
284,935
|
Total
current liabilities
|
385,954
|
|
368,886
|
|
|
|
|
Deferred
income taxes
|
1,354
|
|
1,436
|
Other
liabilities
|
85,870
|
|
83,806
|
Total
liabilities
|
473,178
|
|
454,128
|
|
|
|
|
Total
stockholders' equity
|
89,237
|
|
79,564
|
Total
liabilities and stockholders' equity
|
$
562,415
|
|
$
533,692
|
|
|
|
|
THE
CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|
|
Three
Months Ended
|
|
March
31,
|
|
2012
|
|
2011
|
CASH FLOWS
FROM OPERATING ACTIVITIES:
|
(Unaudited)
|
Net
income
|
$
15,561
|
|
$
11,354
|
Adjustments to reconcile net income to net cash flows
provided by operating activities:
|
|
|
|
Depreciation and
amortization
|
5,029
|
|
4,258
|
Deferred income taxes
|
1,326
|
|
1,535
|
Share-based
compensation
|
1,968
|
|
2,004
|
Excess tax benefits from
share-based compensation arrangements
|
(1,311)
|
|
(1,396)
|
Foreign currency translation
gain
|
(180)
|
|
(695)
|
Amortization of marketable
securities premiums
|
29
|
|
69
|
Changes in operating assets and
liabilities:
|
|
|
|
Membership
fees receivable, net
|
60,236
|
|
51,934
|
Deferred
incentive compensation
|
(1,481)
|
|
(1,435)
|
Prepaid
expenses and other current assets
|
7,358
|
|
(584)
|
Other
non-current assets
|
(1,430)
|
|
(1,329)
|
Accounts
payable and accrued liabilities
|
(13,016)
|
|
(10,413)
|
Accrued
incentive compensation
|
3,470
|
|
(2,009)
|
Deferred
revenues
|
23,765
|
|
30,378
|
Other
liabilities
|
769
|
|
1,317
|
Net cash flows provided by operating activities
|
102,093
|
|
84,988
|
|
|
|
|
CASH FLOWS
FROM INVESTING ACTIVITIES:
|
|
|
|
Purchases
of property and equipment
|
(1,082)
|
|
(2,602)
|
Acquisition of businesses, net of cash
acquired
|
(20,982)
|
|
-
|
Cost
method investment
|
-
|
|
(150)
|
Net cash flows used in investing
activities
|
(22,064)
|
|
(2,752)
|
|
|
|
|
CASH FLOWS
FROM FINANCING ACTIVITIES:
|
|
|
|
Proceeds
from the exercise of common stock options
|
771
|
|
774
|
Proceeds
from the issuance of common stock under the employee stock purchase
plan
|
128
|
|
108
|
Excess tax
benefits from share-based compensation arrangements
|
1,311
|
|
1,396
|
Purchases
of treasury shares
|
(1,570)
|
|
(1,786)
|
Payment of
dividends
|
(5,833)
|
|
(5,145)
|
Net cash flows used in financing
activities
|
(5,193)
|
|
(4,653)
|
|
|
|
|
Effect of
exchange rates on cash
|
434
|
|
567
|
|
|
|
|
NET
INCREASE IN CASH AND CASH EQUIVALENTS
|
75,270
|
|
78,150
|
Cash and
cash equivalents, beginning of period
|
133,429
|
|
102,498
|
Cash and
cash equivalents, end of period
|
$
208,699
|
|
$
180,648
|
SOURCE The Corporate Executive Board Company