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The Corporate Executive Board Reports First Quarter Earnings of $0.42 Per Diluted Share and 29% Revenue Growth

WASHINGTON--(BUSINESS WIRE)--April 25, 2006--The Corporate Executive Board Company (CEB) (NASDAQ/NM: EXBD) today announced financial results for the first quarter ended March 31, 2006. Revenues for the first quarter increased 28.7% to $105.1 million from $81.6 million for the first quarter of 2005. Net income and earnings per diluted share for the first quarter were $17.1 million and $0.42, respectively.

Effective January 2006, the Company adopted Statement of Financial Accounting Standards No. 123(R) (FAS No. 123(R)), which provides the accounting rules for share based compensation. To present results on a comparable basis to the prior year, the Company is providing adjusted financial results, including net income and earnings per diluted share, that exclude the effects of share based compensation.

Excluding the effects of share based compensation in accordance with FAS No. 123(R), adjusted net income for the first quarter of 2006 increased 23.3% to $21.1 million from $17.1 million for the first quarter of 2005. Adjusted earnings per diluted share for the first quarter of 2006 increased 21.4% to $0.51 from $0.42 in 2005. A reconciliation of CEB's reported and adjusted results is set forth in the notes to the Financial Highlights section below.

Tom Monahan, CEO of the Corporate Executive Board commented, "We are obviously happy with such a strong start to 2006. Our 29.3% contract value growth and 92% client renewal rate at year-end 2005 had positioned us well for 2006, and we built on that momentum as we entered the year.

"Underpinning our strong revenue and contract value growth in the first quarter was continued success across our three growth drivers. Our new programs are off to a great start and growth from cross sales and growth from new clients are both running above the high end of our annual target range. The cross-sell ratio stands at 3.78 membership programs per institution, up from 3.6 at this time last year. New clients joining their first CEB program in the quarter included: Abercrombie & Fitch Co., Bally International AG, Enel S.p.A., Forest Laboratories, Inc., Genuine Parts Company, Guardian Media Group plc, and Pinault-Printemps-Redoute Group. You can see the total impact of these key growth metrics reflected in our 29.1% contract value growth for the quarter.

"Today, I am also delighted to announce our 39th membership program: The Investor Relations Roundtable (IRR). This program serves senior executives responsible for managing corporate relationships with the investment community. As with all of our new programs, the Investor Relations program has benefited enormously from the advice and guidance of our charter members, including senior executives from: ABN AMRO Bank N.V., Alcoa Inc., IBM Corporation and Principal Financial Services, Inc. IRR is the second of our planned five to six new program launches for 2006 and brings our total number of membership-based programs to 39."

Share Repurchase

During the quarter ended March 31, 2006, the Company repurchased approximately 406,000 shares of its common stock at a total cost of approximately $39 million. Repurchases will 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 2006

The following statements summarize the Company's guidance for 2006.

The Company is reiterating its target for annual revenue growth of a minimum of 25% accompanied by continued modest expansion in the adjusted operating margin, excluding share based compensation under FAS No. 123(R), within the target annual range of 25 - 30%. As in the past, the operating margin may fluctuate on a quarterly basis. The Company expects a quarterly revenue distribution of approximately $110 million for the second quarter, $116 million for the third quarter, and $124 million for the fourth quarter of 2006.

For 2006, the Company expects interest income of approximately $25.5 to $26.0 million, an effective income tax rate of approximately 38.5% and diluted weighted shares outstanding of approximately 41.0 - 41.5 million.

The Company is increasing its guidance on GAAP annual diluted earnings per share for 2006 to $1.88. For the balance of 2006, the Company expects GAAP earnings per diluted share of $0.42 for the second quarter, $0.48 for the third quarter, and $0.56 for the fourth quarter.

The Company is increasing its guidance on adjusted annual diluted earnings per share for 2006, excluding share based compensation under FAS No. 123(R), to $2.27. For the balance of 2006, the Company expects adjusted earnings per diluted share of $0.52 for the second quarter, $0.58 for the third quarter, and $0.66 for the fourth quarter, reflecting a net effect for share based compensation of $0.10 for each quarter.

The earnings per diluted share, interest income and weighted shares outstanding guidance includes only share repurchases made as of March 31, 2006.

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, difficulties we may experience in anticipating market trends, our need 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 SFAS No. 123(R), whether the Washington, D.C. Office of Tax and Revenue withdraws our QHTC status 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 2005 annual report on Form 10-K. The forward-looking statements in this press release are made as of April 25, 2006, 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 2,800 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)

                                       Selected
                                        Growth    Three Months Ended
                                        Rates          March 31,
                                      ---------- ---------------------
 Financial Highlights
 (GAAP, as reported):                               2006       2005
                                                 ---------- ----------
  Revenues                                28.7%  $ 105,069  $  81,608
  Net income                              (0.1%) $  17,119  $  17,142
  Basic earnings per share                       $    0.43  $    0.44
  Diluted earnings per share               0.0%  $    0.42  $    0.42
  Weighted average shares outstanding:
    Basic                                           39,579     39,021
    Diluted                                         41,065     40,577

Financial Highlights (Adjusted
 amounts to exclude effects of share
 based compensation under FAS
 No. 123(R)):(1)
  Adjusted cost of services                      $  34,374  $  26,394
  Adjusted member relations and
   marketing                                     $  27,343  $  21,613
  Adjusted general and administrative            $  13,085  $   9,394
  Adjusted income from operations         24.2%  $  28,270  $  22,758
  Adjusted net income                     23.3%  $  21,138  $  17,142
  Adjusted diluted earnings per share     21.4%  $    0.51  $    0.42

  Adjusted Percentages of Revenues:(1)
    Adjusted cost of services                         32.7%      32.3%
    Adjusted member relations and
     marketing                                        26.0%      26.5%
    Adjusted general and
     administrative                                   12.5%      11.5%
    Adjusted income from operations                   26.9%      27.9%
----------------------------------------------------------------------
(1) The following table reconciles GAAP to adjusted financial
    statement amounts, considering the share based compensation
    recognized by the Company in accordance with FAS No. 123(R):




                                          Three Months Ended
                                            March 31, 2006
                                --------------------------------------
                                  GAAP, as   Share based
Financial statement descriptions  reported   compensation   Adjusted
                                ------------ ------------ ------------
  Cost of services              $    37,460  $    (3,086) $    34,374
  Member relations and marketing     28,850       (1,507)      27,343
  General and administrative         15,027       (1,942)      13,085
  Income from operations             21,735        6,535       28,270
  Net income                    $    17,119  $     4,019  $    21,138
  Diluted earnings per share    $      0.42  $      0.09  $      0.51


                                          Three Months Ended
                                            March 31, 2006
                                --------------------------------------
                                  GAAP, as   Share based
Financial statement descriptions  reported   compensation   Adjusted
                                ------------ ------------ ------------
  Cost of services              $    26,394           --  $    26,394
  Member relations and marketing     21,613           --       21,613
  General and administrative          9,394           --        9,394
  Income from operations             22,758           --       22,758
  Net income                    $    17,142           --  $    17,142
  Diluted earnings per share    $      0.42           --  $      0.42

To supplement the company's consolidated financial statements
presented in accordance with GAAP, CEB uses non-GAAP measures of
certain components of financial performance. These non-GAAP measures
include non-GAAP net income, non-GAAP operating income, and non-GAAP
earnings per diluted share. CEB makes reference to measures of
operating income, gross profit, certain expenses (including cost of
services, member relations and marketing and general and
administrative), net income and earnings per share for Q1-06, which
exclude FAS No. 123 (R) share based compensation to allow management
and investors to better understand the effects of share based
compensation on CEB's results of operations and to provide a
comparison of results in the current period to those in prior periods
that did not include FAS No. 123(R) share based compensation. Although
these non-GAAP financial measures adjust expense and other items to
exclude the accounting treatment of share based compensation, they
should not be viewed as a pro-forma presentation reflecting the
elimination of the underlying share based compensation programs, as
those programs are an important element of CEB's compensation
structure and generally accepted accounting principles indicate that
all forms of share based payments should be valued and included as
appropriate in results of operations. CEB discloses this information
to the public to enable investors who wish to more easily assess the
company's performance on the same basis applied by management and to
ease comparison on both a GAAP and non-GAAP basis among other
companies that separately identify share based compensation expenses.
CEB's reference to these measures should be considered in addition to
results that are prepared under current accounting standards but
should not be considered a substitute for results that are presented
as consistent with GAAP. FAS No. 123(R) did not have a significant
effect on the diluted share number for the quarter.

The Company also recognized $1.9 million and $0.5 million reflecting
additional employer taxes as a result of the taxable income that our
employees recognized upon the exercise of non-qualified common stock
options for the three months ended March 31, 2006 and 2005,
respectively. The Company has recorded such expenses in the same
expense line item as other compensation paid to the relevant
categories of employees as follows: Cost of services, $0.8 million and
$0.3 million, Marketing and member services, $0.3 million and $0.1
million, and General and administrative, $0.8 million and $0.1 for
2006 and 2005, respectively. The additional employer taxes incurred by
the Company are reflected within both the GAAP amounts as reported and
the adjusted financial results presented within this press release.




                 THE CORPORATE EXECUTIVE BOARD COMPANY
            Operating Statistic and Statement of Operations
                 (in thousands, except per share data)
                              (Unaudited)

                                                  Three Months Ended
                                       Selected        March 31,
                                        Growth   ---------------------
                                        Rates       2006       2005
                                      ---------- ---------- ----------
Operating Statistic
Contract Value(1) (at period end)         29.1%  $ 408,771  $ 316,640

Statement of Operations
Revenues                                  28.7%  $ 105,069  $  81,608
Cost of services                                    37,460     26,394
                                                 ---------- ----------
    Gross profit                                    67,609     55,214

Member relations and marketing                      28,850     21,613
General and administrative                          15,027      9,394
Depreciation and amortization                        1,997      1,449
                                                 ---------- ----------
    Income from operations                (4.5%)    21,735     22,758

Other income, net                                    6,100      3,019
                                                 ---------- ----------

Income before provision for income taxes            27,835     25,777
Provision for income taxes                          10,716      8,635
                                                 ---------- ----------
    Net income                            (0.1%) $  17,119  $  17,142
                                                 ========== ==========

Basic earnings per share                         $    0.43  $    0.44
Diluted earnings per share                 0.0%  $    0.42  $    0.42

Weighted average shares outstanding
  Basic                                             39,579     39,021
  Diluted                                           41,065     40,577

Adjusted income from operations           24.2%  $  28,270  $  22,758
Adjusted net income                       23.3%  $  21,138  $  17,142
Adjusted diluted earnings per share       21.4%  $    0.51  $    0.42

Percentages of Revenues
Gross profit                                          64.3%      67.7%
Member relations and marketing                        27.5%      26.5%
General and administrative                            14.3%      11.5%
Income from operations                                20.7%      27.9%
----------------------------------------------------------------------
(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.




                 THE CORPORATE EXECUTIVE BOARD COMPANY
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                            (in thousands)

                                                March 31,   Dec. 31,
                                                  2006        2005
                                               ----------- -----------
                                               (Unaudited)
Assets

Current assets:
  Cash and cash equivalents                    $  238,634  $  424,276
  Marketable securities                           106,595       2,264
  Membership fees receivable, net                  74,177     120,242
  Deferred income taxes, net                       47,585      11,880
  Deferred incentive compensation                  10,817      11,489
  Prepaid expenses and other current assets        11,803       8,944
                                               ----------- -----------
    Total current assets                          489,611     579,095

Deferred income taxes, net                          3,105       2,958
Marketable securities                             207,263     118,096
Goodwill and other intangibles                      8,281       8,445
Property and equipment, net                        21,559      18,401
                                               ----------- -----------
    Total assets                               $  729,819  $  726,995
                                               =========== ===========

Liabilities and stockholders' equity

Current liabilities:
  Accounts payable and accrued liabilities     $   33,245  $   43,667
  Accrued incentive compensation                   15,923      27,045
  Deferred revenues                               266,910     261,300
                                               ----------- -----------
    Total current liabilities                     316,078     332,012

Other liabilities                                   8,626       9,569
                                               ----------- -----------
    Total liabilities                             324,704     341,581

Total stockholders' equity                        405,115     385,414
                                               ----------- -----------
    Total liabilities and stockholders' equity $  729,819  $  726,995
                                               =========== ===========




                 THE CORPORATE EXECUTIVE BOARD COMPANY
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (in thousands)
                              (Unaudited)

                                                 Three Months Ended
                                                      March 31,
                                               -----------------------
                                                  2006        2005
                                               ----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                   $   17,119  $   17,142
  Adjustments to reconcile net income to net
   cash flows provided by operating
   activities:
    Depreciation and amortization                   2,023       1,449
    Deferred income taxes                          10,716       8,635
    Share based compensation                        6,535          --
    Excess tax benefits from share based
     compensation arrangements(1)                 (12,797)         --
    Amortization of marketable securities
     premiums, net                                   (216)        635
    Changes in operating assets and
     liabilities:
      Membership fees receivable, net              46,065      34,753
      Deferred incentive compensation                 672         896
      Prepaid expenses and other current
       assets                                       1,105        (615)
      Accounts payable and accrued liabilities    (14,562)     (2,367)
      Accrued incentive compensation              (11,131)     (5,817)
      Deferred revenues                             5,610        (862)
      Other liabilities                              (943)        506
                                               ----------- -----------
        Net cash flows provided by operating
         activities                                50,196      54,355
                                               ----------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment, net         (4,945)     (1,160)
  (Purchases) sales and maturities of
   marketable securities, net                    (194,920)     21,559
                                               ----------- -----------
    Net cash flows (used in) provided by
     investing activities                        (199,865)     20,399
                                               ----------- -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from the exercise of common stock
   options                                          1,555      44,676
  Proceeds from the issuance of common stock
   under the employee stock purchase plan             416         334
  Excess tax benefits from share based
   compensation arrangements(1)                    12,797          --
  Purchase of treasury shares                     (38,960)    (16,218)
  Payment of dividends                            (11,851)     (3,873)
  Reimbursement of common stock offering costs         70          35
  Payment of common stock offering costs               --          (2)
                                               ----------- -----------
    Net cash flows (used in) provided by
     financing activities                         (35,973)     24,952
                                               ----------- -----------

NET (DECREASE) INCREASE IN CASH AND CASH
 EQUIVALENTS                                     (185,642)     99,706

Cash and cash equivalents, beginning of period    424,276     113,996
                                               ----------- -----------

Cash and cash equivalents, end of period       $  238,634  $  213,702
                                               =========== ===========
----------------------------------------------------------------------
(1) In accordance with FAS No. 123(R), excess tax benefits related to
    share based compensation are now classified as a cash flow from
    financing activities, rather than as a cash flow from operating
    activities. The net effect of this change for the quarter ending
    March 31, 2006 is to move $12.8 million of excess tax benefits
    from an operating cash flow to a cash flow from financing
    activities, leaving total cash flow unchanged.

    CONTACT: Corporate Executive Board Company (CEB)
             Timothy R. Yost, 202-777-5455
             heroldl@executiveboard.com

    SOURCE: Corporate Executive Board Company (CEB)