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The Corporate Executive Board Reports Third-Quarter Diluted Earnings Per Share of $0.61 on Revenues of $142 Million

ARLINGTON, Va.--(BUSINESS WIRE)--

The Corporate Executive Board Company ("CEB" or the "Company") (NASDAQ: EXBD) today announces financial results for the third quarter ended September 30, 2008. Revenues for the third quarter increased 4.5% to $142.4 million from $136.3 million for the third quarter of 2007. Net income decreased 2.6% to $20.8 million from $21.4 million. Diluted earnings per share for the third quarter of 2008 increased 3.4% to $0.61 from $0.59 for the third quarter of 2007.

For the nine months ended September 30, 2008, revenues were $421.6 million, an 8.0% increase from $390.5 million for the nine months ended September 30, 2007. Net income for the first nine months of 2008 decreased 8.2% to $53.3 million from $58.1 million for the first nine months of 2007. Diluted earnings per share for the first nine months of 2008 were $1.55, a 0.6% increase from $1.54 for the first nine months of 2007.

Contract Value growth at September 30, 2008 was 2.8% as a result of new client acquisitions, cross-sales to existing clients, and new program launches. The average cross-sell ratio was 3.18, reflecting cross-sell ratios of 3.81 in the Company's large corporate market and 1.57 for middle market customers.

The Company also announces the fourth membership program launch of 2008, the Division Finance Forum (DFF). This program leverages our base of data and best practices to serve the senior executives responsible for planning and reporting at the divisional level. This launch brings the total number of membership-based programs to 52. Companies joining their first CEB program in the quarter included: Fidelity National Information Services, Inc., Galeries Lafayette S.A., Metro-Goldwyn-Mayer Inc., Oil and Natural Gas Corporation Ltd., Oxford University Press, Vedanta Resources plc, and Virgin Mobile USA, LP.

Tom Monahan, Chairman and Chief Executive Officer commented, "Our performance on the quarter was solid. Contract value growth was moderate as progress on our operating priorities for the year was offset in some places by turmoil in the financial markets and a difficult economic and budgeting environment. We also delivered against our earnings targets, due to effective cost management. Overall, I'm encouraged by the response of our teams to a challenging economic environment for our member companies as we continue to work very hard to achieve our original target of 10 to 15% contract value growth. In a less volatile operating environment, I would have a high degree of confidence in our ability to meet this goal. Current market conditions, however, make this a far more challenging objective. Against this backdrop of continued economic difficulty, I'm confident that our intensive focus on member impact and careful cost management will enable us to succeed in 2008 and beyond."

SHARE REPURCHASE

During the nine months ended September 30, 2008, the Company repurchased approximately 1,036,000 shares of its common stock at a total cost of $41.8 million. Repurchases may continue to be made in open market and privately negotiated transactions subject to market conditions. No minimum number of shares has been fixed. The Company is funding its share repurchases with cash on hand and cash generated from operations.

OUTLOOK FOR 2008

The following statements summarize the Company's guidance for 2008. The Company is updating its guidance for annual revenue growth for 2008 of approximately 5%-7%, or $559-$568 million, reflecting weaker than expected contract value growth through September 30, 2008. For the fourth quarter of 2008, the Company expects revenue of approximately $138-$146 million.

The Company is updating its guidance range on annual diluted earnings per share for 2008 to $2.09 - $2.17. The Company expects diluted earnings per share of $0.54-$0.62 for the fourth quarter. Included in this guidance is approximately $4.0 million of expense relating to share-based compensation for the fourth quarter of 2008.

The Company expects an EBITDA margin of approximately 24% for 2008.

For 2008, the Company expects Depreciation and amortization expense of $22 to $23 million, Other expense of approximately $1.5 million, an effective income tax rate of approximately 40.0%, and diluted weighted average shares outstanding of approximately 34.25 -34.75 million.

The diluted earnings per share, other expense, and weighted average shares outstanding guidance includes only share repurchases made as of September 30, 2008.

NON-GAAP FINANCIAL MEASURE

This press release and the accompanying tables include a discussion of EBITDA, which is a non-GAAP financial measure 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. This non-GAAP measure may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. Furthermore, we intend to continue to provide this non-GAAP financial measure as part of our future earnings discussions and, therefore, the inclusion of this non-GAAP financial measure will provide consistency in our financial reporting. A reconciliation of this non-GAAP measure to GAAP results is provided below.

                                 Three Months Ended Nine Months Ended
                                   September 30,      September 30,
                                 ------------------ ------------------
                                   2008      2007     2008     2007
                                 --------- -------- -------- ---------
 Net income                       $20,833  $21,392  $53,322  $ 58,085
 Interest income, net                (897)  (3,233)  (3,586)  (14,437)
 Depreciation and amortization      5,021    4,176   15,766    10,247
 Provision for income taxes        12,389   13,392   34,048    36,361
                                 --------- -------- -------- ---------
 EBITDA                           $37,346  $35,727  $99,550  $ 90,256
                                 ========= ======== ======== =========

We believe that EBITDA is relevant and useful information for our investors. We use this non-GAAP financial measure for internal budgeting and other managerial purposes, when publicly providing our business outlook and as a measurement for potential acquisitions. A limitation associated with 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 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. You are hereby cautioned that these statements may be affected by the important factors, among others, set forth below and in CEB's 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. 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 and to anticipate or adapt to market trends, our potential inability to attract and retain a significant number of highly skilled employees, 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, 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 under FAS No. 123(R), our potential inability to make, integrate and maintain acquisitions and investments, the amount and timing of the benefits expected from acquisitions and investments 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 CEB's filings with the U.S. Securities and Exchange Commission, including, but not limited to, its 2007 Annual Report on Form 10-K. The forward-looking statements in this press release are made as of October 22, 2008, and we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

The Corporate Executive Board Company is a leading provider of best practices research and analysis focusing on corporate strategy, operations and general management issues. CEB provides its integrated set of services currently to more than 4,700 of the world's largest and most prestigious corporations, including over 80% of the Fortune 500. These services are provided primarily on an annual subscription basis and include best practices research studies, executive education seminars, customized research briefs and Web-based access to a library of over 275,000 corporate best practices.

                THE CORPORATE EXECUTIVE BOARD COMPANY
                         Financial Highlights
                (In thousands, except per share data)
                             (Unaudited)



                         Three Months Ended          Nine Months Ended
                Selected   September 30,    Selected   September 30,
                 Growth  ------------------  Growth  -----------------
                 Rates     2008      2007    Rates     2008     2007
                -------- --------- -------- -------- -------- --------
Financial
 Highlights
   (GAAP, as
    reported):
Revenues            4.5%  $142,409 $136,288     8.0% $421,605 $390,510
Net income        (2.6)%  $ 20,833 $ 21,392   (8.2)% $ 53,322 $ 58,085
Basic earnings
 per share          1.7%  $   0.61 $   0.60   (0.6)% $   1.56 $   1.57
Diluted
 earnings per
 share              3.4%  $   0.61 $   0.59     0.6% $   1.55 $   1.54
Weighted
 average shares
 outstanding:
      Basic                 34,022   35,932            34,253   37,106
      Diluted               34,117   36,346            34,374   37,626
                THE CORPORATE EXECUTIVE BOARD COMPANY
           Operating Statistic and Statements of Operations
                (In thousands, except per share data)
                             (Unaudited)



                                                  Three Months Ended
                                         Selected    September 30,
                                          Growth  -------------------
                                          Rates     2008      2007
                                         -------- --------- ---------

Operating Statistic
Contract Value (1) (at period end)          2.8%  $537,989  $523,134

Financial Highlights
Revenues                                    4.5%  $142,409  $136,288
Cost of services (2)                                44,051    45,600
                                                  --------- ---------
    Gross profit                                    98,358    90,688

Member relations and marketing (2)                  39,642    38,063
General and administrative (2)                      16,584    16,898
Depreciation and amortization                        5,021     4,176
                                                  --------- ---------
    Income from operations                 17.6%    37,111    31,551

Other (expense) income, net (3)                     (3,889)    3,233
                                                  --------- ---------

Income before provision for income taxes            33,222    34,784
Provision for income taxes                          12,389    13,392
                                                  --------- ---------
    Net income                             (2.6)% $ 20,833  $ 21,392
                                                  ========= =========

Basic earnings per share                    1.7%  $   0.61  $   0.60
Diluted earnings per share                  3.4%  $   0.61  $   0.59

Weighted average shares outstanding
   Basic                                            34,022    35,932
   Diluted                                          34,117    36,346

Percentages of Revenues
Gross profit                                          69.1%     66.5%
Member relations and marketing                        27.8%     27.9%
General and administrative                            11.6%     12.4%
Depreciation and amortization                          3.5%      3.1%
Income from operations                                26.1%     23.2%
EBITDA (4)                                            26.2%     26.2%

----------------------------------------------------------------------


                                                    Nine Months Ended
                                          Selected    September 30,
                                           Growth  -------------------
                                           Rates     2008      2007
                                          -------- --------- ---------

Operating Statistic
Contract Value (1) (at period end)

Financial Highlights
Revenues                                     8.0%  $421,605  $390,510
Cost of services (2)                                134,718   137,540
                                                   --------- ---------
    Gross profit                                    286,887   252,970

Member relations and marketing (2)                  122,318   109,791
General and administrative (2)                       59,183    52,923
Depreciation and amortization                        15,766    10,247
                                                   --------- ---------
    Income from operations                  12.0%    89,620    80,009

Other (expense) income, net (3)                      (2,250)   14,437
                                                   --------- ---------

Income before provision for income taxes             87,370    94,446
Provision for income taxes                           34,048    36,361
                                                   --------- ---------
    Net income                              (8.2)% $ 53,322  $ 58,085
                                                   ========= =========

Basic earnings per share                    (0.6)% $   1.56  $   1.57
Diluted earnings per share                   0.6%  $   1.55  $   1.54

Weighted average shares outstanding
   Basic                                             34,253    37,106
   Diluted                                           34,374    37,626

Percentages of Revenues
Gross profit                                           68.0%     64.8%
Member relations and marketing                         29.0%     28.1%
General and administrative                             14.0%     13.6%
Depreciation and amortization                           3.7%      2.6%
Income from operations                                 21.3%     20.5%
EBITDA (4)                                             23.6%     23.1%

----------------------------------------------------------------------

(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.
(2)   The following amounts relating to share-based compensation are
 included in the Statements of Operations above for the three months
 ended September 30, 2008 and 2007, respectively (in millions):  Cost
 of services, $1.7 and $2.8, Member relations and marketing, $0.6 and
 $1.2 and General and administrative, $1.2 and $2.0.  The following
 amounts relating to share-based compensation are included in the
 Statements of Operations above for the nine months ended September
 30, 2008 and 2007, respectively:  Cost of services, $4.4 and $8.6,
 Member relations and marketing, $0.8 and $3.8 and General and
 administrative, $4.5 and $5.7.
(3)   Other (expense) income for the three months ended September 30,
 2008 includes $0.9 million of interest income offset by a $1.8
 million write-down of a cost method investment, a $1.6 million
 foreign currency loss, and a $1.4 million decrease in the fair value
 of deferred compensation plan assets.
(4)   See "NON-GAAP FINANCIAL MEASURE" for further explanation.
                THE CORPORATE EXECUTIVE BOARD COMPANY
                CONDENSED CONSOLIDATED BALANCE SHEETS
                            (In thousands)

                                          Sept. 30, 2008 Dec. 31, 2007
                                          -------------- -------------
                                           (Unaudited)
Assets

Current assets:
    Cash and cash equivalents             $       11,432 $      47,585
    Marketable securities                         28,491        24,153
    Membership fees receivable, net               86,220       161,336
    Deferred income taxes, net                    14,541        12,710
    Deferred incentive compensation               11,491        15,544
    Prepaid expenses and other current
     assets                                        8,253        10,638
                                          -------------- -------------
               Total current assets              160,428       271,966

Deferred income taxes, net                        24,945        24,307
Marketable securities                             47,005        72,618
Property and equipment, net                      107,546        91,904
Goodwill                                          42,626        42,626
Intangible assets, net                            17,787        22,143
Other non-current assets                          15,549        19,208
                                          -------------- -------------
               Total assets               $      415,886 $     544,772
                                          ============== =============

Liabilities and stockholders' equity

Current liabilities:
    Accounts payable and accrued
     liabilities                          $       37,833 $      62,681
    Accrued incentive compensation                21,738        31,355
    Deferred revenues                            246,277       323,395
                                          -------------- -------------
               Total current liabilities         305,848       417,431

Other liabilities                                 65,407        59,794
                                          -------------- -------------
               Total liabilities                 371,255       477,225

Total stockholders' equity                        44,631        67,547
                                          -------------- -------------
               Total liabilities and
                stockholders' equity      $      415,886 $     544,772
                                          ============== =============
                THE CORPORATE EXECUTIVE BOARD COMPANY
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (In thousands)
                             (Unaudited)

                                                   Nine Months Ended
                                                     September 30,
                                                  --------------------
                                                    2008       2007
                                                  --------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
      Net income                                  $ 53,322  $  58,085
      Adjustments to reconcile net income to net
       cash flows provided by operating
       activities:
          Depreciation and amortization             15,766     10,247
          Deferred income taxes                       (877)    (2,759)
          Share-based compensation                   9,681     18,103
          Excess tax benefits from share-based
           compensation arrangements                   ---     (2,409)
          Amortization of marketable securities
           premiums (discounts), net                   533       (633)
               Changes in operating assets and
                liabilities:
               Membership fees receivable, net      75,116     70,159
               Deferred incentive compensation       4,053      2,100
               Prepaid expenses and other current
                assets                               2,385        734
               Other non-current assets              4,659     (5,291)
               Accounts payable and accrued
                liabilities                        (16,760)   (20,244)
               Accrued incentive compensation       (9,617)    (2,229)
               Deferred revenues                   (77,118)   (56,356)
               Other liabilities                     5,614      2,400
                                                  --------- ----------
                    Net cash flows provided by
                     operating activities           66,757     71,907
                                                  --------- ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchases of property and equipment, net     (38,141)   (16,482)
      Cost method investment                           ---     (3,829)
      Acquisition of business, net of cash
       acquired                                        ---    (58,288)
      Sales and maturities of marketable
       securities, net                              20,810    219,098
                                                  --------- ----------
                    Net cash flows (used in)
                     provided by investing
                     activities                    (17,331)   140,499
                                                  --------- ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Proceeds from the exercise of common stock
       options                                         100        691
      Proceeds from the issuance of common stock
       under the employee stock purchase plan        1,133      1,630
      Excess tax benefits from share-based
       compensation arrangements                       ---   2,409
      Purchase of treasury shares                  (41,840)  (270,764)
      Payment of dividends                         (44,972)   (43,833)
                                                  --------- ----------
                    Net cash flows used in
                     financing activities          (85,579)  (309,867)
                                                  --------- ----------

NET DECREASE IN CASH AND CASH EQUIVALENTS          (36,153)   (97,461)
Cash and cash equivalents, beginning of period      47,585    171,367
                                                  --------- ----------

Cash and cash equivalents, end of period          $ 11,432  $  73,906
                                                  ========= ==========

Source: The Corporate Executive Board Company