(Source: Business Wire)
The Corporate Executive Board Company ("CEB" or the "Company") (NASDAQ:
EXBD) today announces financial results for the third quarter and nine
months ended September 30, 2009. Revenues decreased 25.0% to $106.8
million for the third quarter of 2009 from $142.4million for the third
quarter of 2008. Net income for the third quarter of 2009 was $14.2
million, or $0.41 per diluted share, compared to $20.0 million, or $0.59
per diluted share, for the same period of 2008. Excluding the after tax
effect of restructuring costs, adjusted net income was $15.6 million and
non-GAAP diluted earnings per share was $0.45 for the third quarter of
2009.
For the first nine months of 2009, revenues were $335.0million, a 20.6%
decrease from $421.6million for the first nine months of 2008. Net
income for the first nine months of 2009 decreased to $32.2 million from
$50.6 million for the same period in 2008. Diluted earnings per share
for the first nine months of 2009 was $0.94, a decrease from $1.47 for
the same period in 2008. Excluding the after tax effects of costs
associated with exit activities and restructuring costs, adjusted net
income was $43.7 million and non-GAAP diluted earnings per share was
$1.28 for the first nine months of 2009.
Contract Value decreased in the third quarter of 2009 by 28.0% compared
with the same period in 2008 due to reduced memberships from some large
corporate members, decreased new sales due to macro-economic conditions,
and expected Contract Value losses from programs that the Company is
consolidating across 2009. The average cross-sell ratio was 2.80,
reflecting cross-sell ratios of 3.23 in the Company's large corporate
market and 1.69 for middle market customers.
Thomas Monahan, Chairman and Chief Executive Officer, commented "During
the third quarter our business continued to stabilize as evidenced by a
slower rate of sequential contract value decline against the backdrop of
a less volatile environment. I am proud of the entire organization's
commitment to managing through this transition. A number of our teams
have maintained solid growth trajectories or returned to growth, and
more are approaching that stage every day. While I'm pleased with their
progress, we are maintaining a cautious outlook given the lag between
contract value and revenue trends, our plans to reinvest some of our
recent operational efficiency gains, and the still-uncertain economic
climate."
OUTLOOK FOR 2009
The Company is updating its 2009 guidance and now expects revenues
ranging from $430 to $440 million, non-GAAP diluted earnings per share
of $1.40 to $1.50, depreciation and amortization expense of $22.5 to
$23.5 million and an Adjusted EBITDA margin of between 23.0% and 24.0%.
NON-GAAP FINANCIAL MEASURES
This press release and the accompanying tables include a discussion of
EBITDA, 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 "EBITDA" refers to a financial measure that we define as
earnings before interest income, net, income taxes, and depreciation and
amortization. The term "Adjusted EBITDA" refers to a financial measure
that we define as earnings before interest income, net, income taxes,
depreciation and amortization, impairment loss, costs associated with
exit activities and restructuring costs. The term "Adjusted net income"
refers to net income excluding the after tax effects of impairment loss,
costs associated with exit activities and restructuring costs. "Non-GAAP
diluted earnings per share" refers to net income excluding the after tax
per share effects of impairment loss, costs associated with exit
activities and restructuring costs.
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 these non-GAAP measures to GAAP results is provided
below.
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Net income $ 14,177 $ 20,002 $ 32,195 $ 50,643
Interest income, net (325 ) (896 ) (1,398 ) (3,594 )
Depreciation and amortization 5,113 5,021 17,349 15,766
Provision for income taxes 8,569 11,900 20,584 32,327
EBITDA $ 27,534 $ 36,027 $ 68,730 $ 95,142
Costs associated with exit activities -- -- 11,518 --
Restructuring costs 2,327 -- 7,515 --
Adjusted EBITDA $ 29,861 $ 36,027 $ 87,763 $ 95,142
Three Months Ended Nine Months Ended
September, 30, September 30,
2009 2008 2009 2008
Net income $ 14,177 $ 20,002 $ 32,195 $ 50,643
Costs associated with exit activities, net of tax -- -- 6,911 --
Restructuring costs, net of tax 1,471 -- 4,584 --
Adjusted net income $ 15,648 $ 20,002 $ 43,690 $ 50,643
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
GAAP diluted earnings per share $ 0.41 $ 0.59 $ 0.94 $ 1.47
Adjustments, net of tax:
Costs associated with exit activities -- -- 0.20 --
Restructuring costs 0.04 -- 0.14 --
Non-GAAP diluted earnings per share $ 0.45 $ 0.59 $ 1.28 $ 1.47
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With respect to the Company's guidance for 2009, reconciliations of
non-GAAP diluted earnings per share to GAAP diluted earnings per share,
Adjusted net income to net income and Adjusted EBITDA to net income as
projected for the year ending December 31, 2009 are not provided because
CEB cannot, without unreasonable effort, determine the components of
GAAP diluted earnings per share and net income to provide
reconciliations to non-GAAP diluted earnings per share and Adjusted
EBITDA for its 2009 fiscal year with certainty at this time.
We believe that EBITDA, 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 EBITDA and Adjusted
EBITDA is that they do 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 income from
operations, which includes depreciation and amortization.
FORWARD-LOOKING STATEMENTS
This news 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. 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 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, and the amount and timing of the benefits expected from
acquisitions and investments, our potential inability to effectively
anticipate, plan for and respond to changing economic and financial
markets conditions, especially during the current turmoil 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 2008 Annual Report on
Form 10-K/A. The forward-looking statements in this press release are
made as of November 2, 2009, 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
The Corporate Executive Board drives faster, more effective decision
making among the world's leading executives and business professionals.
As the premier, network-based knowledge resource, The Corporate
Executive Board provides them with the authoritative and timely guidance
needed to excel in their roles, take decisive action and improve company
performance. Powered by an executive network that spans more than 50
countries and represents more than 80% of the world's Fortune 500
companies, The Corporate Executive Board offers the unique research
insights along with an integrated suite of exclusive tools and resources
that enable the world's most successful organizations to deliver
superior business outcomes. For more information, visit www.exbd.com.
THE CORPORATE EXECUTIVE BOARD COMPANY Financial Highlights (In thousands, except per share data) (Unaudited)
SelectedPercentageChanges Three Months EndedSeptember 30, SelectedPercentageChanges Nine Months EndedSeptember 30,
2009 2008 2009 2008
Financial Highlights
(GAAP, as reported):
Revenues (25.0 )% $ 106,819 $ 142,409 (20.6 )% $ 334,954 $ 421,605
Net income $ 14,177 $ 20,002 $ 32,195 $ 50,643
Basic earnings per share $ 0.42 $ 0.59 $ 0.94 $ 1.48
Diluted earnings per share $ 0.41 $ 0.59 $ 0.94 $ 1.47
Weighted average shares outstanding:
Basic 34,133 34,022 34,099 34,253
Diluted 34,356 34,117 34,248 34,374
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THE CORPORATE EXECUTIVE BOARD COMPANY Operating Statistic and Statements of Operations (In thousands, except per share data) (Unaudited)
Selected Three Months Ended Selected Nine Months Ended
Percentage September 30, Percentage September 30,
Changes 2009 2008 Changes 2009 2008
Operating Statistic
Contract Value ((1)) (at period end) (28.0 )% $ 387,160 $ 537,989
Financial Highlights
Revenues (25.0 )% $ 106,819 $ 142,409 (20.6 )% $ 334,954 $ 421,605
Cost and expenses:
Cost of services ((2)) 34,384 44,830 110,612 137,314
Member relations and marketing ((2)) 29,389 39,972 95,928 123,418
General and administrative ((2)) 13,687 16,795 44,314 59,887
Depreciation and amortization 5,113 5,021 17,349 15,766
Costs associated with exit activities -- -- 11,518 --
Restructuring costs 2,327 -- 7,515 --
Total costs and expenses 84,900 106,618 287,236 336,385
Income from operations 21,919 35,791 47,718 85,220
Other income (expense), net ((3)) 827 (3,889 ) 5,061 (2,250 )
Income before provision for income taxes 22,746 31,902 52,779 82,970
Provision for income taxes 8,569 11,900 20,584 32,327
Net income $ 14,177 $ 20,002 $ 32,195 $ 50,643
Basic earnings per share $ 0.42 $ 0.59 $ 0.94 $ 1.48
Diluted earnings per share $ 0.41 $ 0.59 $ 0.94 $ 1.47
Weighted average shares outstanding
Basic 34,133 34,022 34,099 34,253
Diluted 34,356 34,117 34,248 34,374
Percentages of Revenues
Cost of services 32.2 % 31.5 % 33.0 % 32.6 %
Member relations and marketing 27.5 % 28.1 % 28.6 % 29.3 %
General and administrative 12.8 % 11.8 % 13.2 % 14.2 %
Depreciation and amortization 4.8 % 3.5 % 5.2 % 3.7 %
Income from operations 20.5 % 25.1 % 14.2 % 20.2 %
EBITDA ((4)) 25.8 % 25.3 % 20.5 % 22.6 %
Adjusted EBITDA ((4)) 28.0 % 25.3 % 26.2 % 22.6 %
((1)) We define "Contract Value" as of the quarter-end as the aggregate annualized revenue attributed to all agreements in effect on such date, without regard to the remaining duration of any such agreement. A service of YellowBrix, Inc.
