|The Corporate Executive Board Reports First Quarter Pro Forma Earnings Of $0.20 Per Share On 32.4% Growth In Revenues|
|WASHINGTON, D.C. (May 2, 2000) -- The Corporate Executive Board Company (CEB) (Nasdaq/NM:EXBD) today announced financial results for the first quarter ended March 31, 2000. Revenues for the quarter increased 32.4% to $20,784,000 from $15,703,000 for the first quarter of 1999. Pro forma net income increased 59.4% to $3,320,000 for the quarter from $2,083,000 for the comparable period last year, and pro forma diluted earnings per share were $0.20, up 53.8% from $0.13. Pro forma adjustments exclude stock option and related expenses for both periods and include income taxes at 41.5% for the three months ended March 31, 1999. As expected, the income tax rate for the first quarter of 2000 was 39%.|
Jay McGonigle, CEO of the Corporate Executive Board, remarked, “Our first quarter results again reflected the predictable, scalable nature of our business model. Our strong close to 1999 together with a fast start to the year 2000 contributed to another quarter of better than 30% revenue growth. As expected, this growth was accompanied by margin expansion: pro forma operating margins increased to 23.3% in the first quarter of this year from 21.1% in the first quarter of 1999. This expansion was powered by the underlying scalability of our business model, as we leveraged a fixed-cost research investment over a growing subscriber base.
“Revenue growth for the quarter was attributable to cross-selling, new customer acquisition, new programs and price increases. In the first quarter, our cross-sell ratio climbed to 1.93, from 1.72 in the comparable 1999 period. New customers, such as Honeywell International Inc., LSI Logic Corporation, Level 3 Communications, Inc. and the Federal Reserve System, joined our established programs as well as our newer program offerings. The two programs launched in 1999, the General Counsel and Marketing programs, both continued to perform very well.
“In the first quarter, I am also pleased to announce the launch of our brand new program on Employee Retention. This program, the first of our three planned for the year 2000, targets HR executives managing one of the hottest issues in today’s challenging labor markets. This launch brings our total number of program offerings to 13 as of the quarter’s close.”
McGonigle concluded, “With a strong pipeline of new product ideas, high degree of revenue visibility, and ample room to cross-sell and add new subscribers in our target Global 3000 universe, we believe that the CEB is well positioned to continue our record of consistent, profitable growth.”
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 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, the dependence on renewal of membership based services, dependence on key personnel, the need to attract and retain qualified personnel, management of growth, new product development, competition, risks associated with anticipating market trends, industry consolidation, variability of quarterly operating results, various factors that could affect the estimated tax rate and possible volatility of stock price. The Company undertakes no obligation to update publicly 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 1,500 of the world’s largest and most prestigious corporations, including over 70% 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 120,000 corporate best practices.