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The Corporate Executive Board Reports Second Quarter Earnings of $0.43 Per Diluted Share and 28% Revenue Growth

WASHINGTON--(BUSINESS WIRE)--July 25, 2006--The Corporate Executive Board Company (CEB) (NASDAQ:EXBD) today announced financial results for the second quarter and six months ended June 30, 2006. Revenues for the second quarter increased 27.8% to $111.7 million from $87.4 million for the second quarter of 2005. Net income and earnings per diluted share for the second quarter were $17.8 million and $0.43, respectively.

For the first six months of 2006, revenues were $216.7 million, a 28.3% increase from $169.0 million for the first half of 2005. Net income and earnings per diluted share for the first six months of 2006 were $34.9 million and $0.85, 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 related to FAS No. 123(R), adjusted net income for the second quarter of 2006 increased 27.9% to $21.8 million from $17.0 million for the second quarter of 2005. Adjusted earnings per diluted share for the second quarter of 2006 increased 29.3% to $0.53 from $0.41 in 2005.

Excluding the effects of share-based compensation related to FAS No. 123(R), adjusted net income for the first six months of 2006 increased 25.6% to $42.9 million from $34.2 million for the first half of 2005. Adjusted earnings per diluted share for the first six months of 2006 increased 23.8% to $1.04 from $0.84 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, Chief Executive Officer of the Corporate Executive Board, commented, "We are very happy with our second-quarter performance and strong results for the first half of 2006. Our key growth metrics are on track with three new programs off to a great start and growth from cross-sell and new clients running above the high end of their original target ranges. The cross-sell ratio climbed to 3.83 membership programs per institution, up from 3.65 at this time last year, and new companies and institutions including Compagnie Financiere Richemont S.A., Embraer- Empresa Brasileira de Aeronautica SA, Legg Mason, Inc., Loews Corporation, Lucasfilm Ltd., Otto GmbH & Co KG and Simmons Bedding Company joined their first CEB program in the quarter. You can see the total impact of our growth metrics in our 28.7% contract value growth for the quarter."

"Today I am also delighted to announce our 40th membership program: The Enterprise Architecture Executive Council. This program serves senior executives responsible for managing the information technology architecture at large companies. Our inaugural research agenda is focused on best practices in driving adoption of enterprise priorities, aligning business strategy with IT innovation and enabling business and IT partners to realize the cost benefits of portfolio management. As with all our new programs, the program has benefited enormously from the advice and guidance of our charter members, including senior executives from Ameriquest Mortgage Company, Lincoln Financial Group, Chevron Phillips Chemical Company LLC, Electronic Arts Inc. and Target Corporation. This is the 40th program, and the third of our planned five to six new program launches for 2006."

The Company also announced that it has entered into a new employment agreement with James J. McGonigle, Executive Chairman of the Board of Directors. Under the new agreement, Mr. McGonigle will continue to serve in his current position as Executive Chairman until December 31, 2006, at which point Mr. McGonigle shall become Non-Executive Chairman for a period of time to be determined by the Board of Directors. Subsequent to December 31, 2006, Mr. McGonigle also will be employed with the Company on a part-time basis through April 1, 2009. The Company also entered into a new employment agreement with Mr. Monahan covering his employment as Chief Executive Officer of the Company. The employment agreements for Mr. McGonigle and Mr. Monahan will be filed with the Securities and Exchange Commission on or about July 25, 2006.

Share Repurchase

During the six months ended June 30, 2006, the Company repurchased approximately 598,000 shares of its common stock at a total cost of approximately $58.4 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 increasing its target for annual revenue growth to a minimum of 27% 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 $118.0 million for the third quarter and $125.5 million for the fourth quarter of 2006.

For 2006, the Company expects other income of approximately $25.25 to $25.75 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 raising its guidance on GAAP annual diluted earnings per share for 2006 to $1.91. For the balance of 2006, the Company expects GAAP earnings per diluted share of $0.50 for the third quarter and $0.56 for the fourth quarter.

The Company is also raising its guidance on adjusted annual diluted earnings per share for 2006, excluding share-based compensation under FAS No. 123(R), of $2.30. For the balance of 2006, the Company expects adjusted earnings per diluted share of $0.60 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 June 30, 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 FAS 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 July 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)


                                                 Three Months Ended
                                  Selected            June 30,
                                   Growth     ------------------------
                                   Rates         2006          2005
                                 -----------  -----------  -----------
Financial Highlights
   (GAAP, as reported):
Revenues                                27.8%  $  111,662  $   87,351
Net income                               4.2%  $   17,763  $   17,046
Basic earnings per share                 2.3%  $     0.44  $     0.43
Diluted earnings per share               4.9%  $     0.43  $     0.41
Weighted average shares outstanding:
     Basic                                         40,394      39,926
     Diluted                                       41,233      41,194

Financial Highlights (Adjusted amounts
   to exclude effects of share-based
   compensation under FAS No. 123(R)):(1)
   Adjusted cost of services                   $   35,817  $   30,088
   Adjusted member relations and
     marketing                                 $   30,499  $   23,478
   Adjusted general and administrative         $   13,602  $    9,385
   Adjusted income from operations      30.4%  $   29,319  $   22,479
   Adjusted net income                  27.9%  $   21,800  $   17,046
   Adjusted diluted earnings per share  29.3%  $     0.53  $     0.41

   Adjusted Percentages of Revenues:(1)
     Adjusted cost of services                       32.1%       34.4%
     Adjusted member relations and marketing         27.3%       26.9%
     Adjusted general and administrative             12.2%       10.7%
     Adjusted income from operations                 26.3%       25.7%


                                                 Six Months Ended
                                Selected             June 30,
                                 Growth     --------------------------
                                  Rates          2006          2005
                               -----------  -------------  -----------
Financial Highlights
   (GAAP, as reported):
Revenues                              28.3%  $   216,731  $   168,959
Net income                             2.0%  $    34,882  $    34,188
Basic earnings per share               0.0%  $      0.87  $      0.87
Diluted earnings per share             1.2%  $      0.85  $      0.84
Weighted average shares outstanding:
     Basic                                        40,026       39,475
     Diluted                                      41,241       40,886

Financial Highlights (Adjusted amounts
   to exclude effects of share-based
   compensation under FAS No. 123(R)):(1)
   Adjusted cost of services                 $    70,191  $    56,482
   Adjusted member relations and
     marketing                               $    57,842  $    45,091
   Adjusted general and
     administrative                          $    26,687  $    18,779
   Adjusted income from operations    27.3%  $    57,589  $    45,237
   Adjusted net income                25.6%  $    42,938  $    34,188
   Adjusted diluted earnings per
     share                            23.8%  $      1.04  $      0.84

   Adjusted Percentages of Revenues:(1)
     Adjusted cost of services                      32.4%        33.4%
     Adjusted member relations and marketing        26.7%        26.7%
     Adjusted general and administrative            12.3%        11.1%
     Adjusted income from operations                26.6%        26.8%

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

(1) The following tables reconcile GAAP to adjusted financial
    statement amounts for the three and six months ended June 30, 2006
    and 2005, respectively, considering the share-based compensation
    recognized by the Company in accordance with FAS No. 123(R):



                                           Three Months Ended
                                              June 30, 2006
                                  ------------------------------------
                                   GAAP, as    Share-based
Financial statement descriptions:  reported   compensation   Adjusted
--------------------------------  ----------- ------------  ----------
 Cost of services                 $    39,059 $     (3,242) $   35,817
 Member relations and marketing   $    31,925 $     (1,426) $   30,499
 General and administrative       $    15,498 $     (1,896) $   13,602
 Income from operations           $    22,755 $      6,564  $   29,319
 Net income                       $    17,763 $      4,037  $   21,800
 Diluted earnings per share       $      0.43 $       0.10  $     0.53


                                           Three Months Ended
                                              June 30, 2005
                                  ------------------------------------
                                   GAAP, as    Share-based
Financial statement descriptions:  reported   compensation   Adjusted
--------------------------------  ----------- ------------  ----------
 Cost of services                 $    30,088           --  $   30,088
 Member relations and marketing   $    23,478           --  $   23,478
 General and administrative       $     9,385           --  $    9,385
 Income from operations           $    22,479           --  $   22,479
 Net income                       $    17,046           --  $   17,046
 Diluted earnings per share       $      0.41           --  $     0.41


                                            Six Months Ended
                                              June 30, 2006
                                  ------------------------------------
                                   GAAP, as    Share-based
Financial statement descriptions:  reported   compensation   Adjusted
--------------------------------  ----------- ------------  ----------
 Cost of services                 $    76,519 $     (6,328) $   70,191
 Member relations and marketing   $    60,775 $     (2,933) $   57,842
 General and administrative       $    30,525 $     (3,838) $   26,687
 Income from operations           $    44,490 $     13,099  $   57,589
 Net income                       $    34,882 $      8,056  $   42,938
 Diluted earnings per share       $      0.85 $       0.19  $     1.04


                                            Six Months Ended
                                              June 30, 2005
                                  ------------------------------------
                                   GAAP, as    Share-based
Financial statement descriptions:  reported   compensation   Adjusted
--------------------------------  ----------- ------------  ----------
 Cost of services                $    56,482            --  $   56,482
 Member relations and marketing  $    45,091            --  $   45,091
 General and administrative      $    18,779            --  $   18,779
 Income from operations          $    45,237            --  $   45,237
 Net income                      $    34,188            --  $   34,188
 Diluted earnings per share      $      0.84            --  $     0.84

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, certain expenses (including cost of
services, member relations and marketing and general and
administrative) and non-GAAP earnings per diluted share. CEB uses
these measures of operating income, gross profit, net income and
earnings per share for the three and six months ended June 30, 2006,
which exclude FAS No. 123(R) share-based compensation to better
understand and compare 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.
Although these non-GAAP measures present financial results on the same
basis as prior year's results, they do not reflect the effects of the
Company's share-based compensation programs and therefore may not be
useful in comparing CEB's results with companies with different
compensation structures. 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 numbers for the
three and six months ended June 30, 2006.

For the six months ended June 30, 2006 and 2005, the Company also
recognized $1.9 million and $0.5 million, respectively, reflecting
additional employer taxes as a result of the taxable income that our
employees recognized upon the exercise of non-qualified common stock
options in March 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 Statements of Operations
                 (in thousands, except per share data)
                              (Unaudited)

                                                 Three Months Ended
                                    Selected           June 30,
                                     Growth    ----------------------
                                      Rates      2006          2005
                                    --------   --------      --------
Operating Statistic

Contract Value (1) (at period end)     28.7%   $426,698      $331,587

Financial Highlights
Revenues                               27.8%   $111,662      $ 87,351
Cost of services                                 39,059        30,088
                                               --------      --------
     Gross profit                                72,603        57,263

Member relations and marketing                   31,925        23,478
General and administrative                       15,498         9,385
Depreciation and amortization                     2,425         1,921
                                               --------      --------
     Income from operations             1.2%     22,755        22,479

Other income, net                                 6,128         3,154
                                               --------      --------
Income before provision for
   income taxes                                  28,883        25,633
Provision for income taxes                       11,120         8,587
                                               --------      --------

     Net income                         4.2%   $ 17,763      $ 17,046
                                               ========      ========

Basic earnings per share                2.3%   $   0.44      $   0.43
Diluted earnings per share              4.9%   $   0.43      $   0.41

Weighted average shares outstanding
   Basic                                         40,394        39,926
   Diluted                                       41,233        41,194

Adjusted income from operations        30.4%  $  29,319      $ 22,479
Adjusted net income                    27.9%  $  21,800      $ 17,046
Adjusted diluted earnings per share    29.3%  $    0.53      $   0.41

Percentages of Revenues
Gross profit                                       65.0%         65.6%
Member relations and marketing                     28.6%         26.9%
General and administrative                         13.9%         10.7%
Income from operations                             20.4%         25.7%


                                                  Six Months Ended
                                    Selected           June 30,
                                     Growth    ----------------------
                                      Rates      2006          2005
                                    --------   --------      --------
Operating Statistic

Contract Value (1) (at period end)

Financial Highlights
Revenues                               28.3%   $216,731      $168,959
Cost of services                                 76,519        56,482
                                               --------      --------
     Gross profit                               140,212       112,477

Member relations and marketing                   60,775        45,091
General and administrative                       30,525        18,779
Depreciation and amortization                     4,422         3,370
                                               --------      --------
     Income from operations            (1.7%)    44,490        45,237

Other income, net                                12,228         6,173
                                               --------      --------

Income before provision for
   income taxes                                  56,718        51,410
Provision for income taxes                       21,836        17,222
                                               --------      --------
     Net income                         2.0%   $ 34,882      $ 34,188
                                               ========      ========

Basic earnings per share                0.0%   $   0.87      $   0.87
Diluted earnings per share              1.2%   $   0.85      $   0.84

Weighted average shares outstanding
   Basic                                         40,026        39,475
   Diluted                                       41,241        40,886

Adjusted income from operations         27.3%  $ 57,589      $ 45,237
Adjusted net income                     25.6%  $ 42,938      $ 34,188
Adjusted diluted earnings per share     23.8%  $   1.04      $   0.84

Percentages of Revenues
Gross profit                                       64.7%         66.6%
Member relations and marketing                     28.0%         26.7%
General and administrative                         14.1%         11.1%
Income from operations                             20.5%         26.8%

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

(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)

                                        June 30, 2006    Dec. 31, 2005
                                        -------------    -------------
                                         (Unaudited)
Assets

Current assets:
  Cash and cash equivalents             $     225,626   $      424,276
  Marketable securities                       107,490            2,264
  Membership fees receivable, net              76,826          120,242
  Deferred income taxes, net                   36,646           11,880
  Deferred incentive compensation              11,029           11,489
  Prepaid expenses and other current
    assets                                     12,045            7,671
                                        -------------    -------------
     Total current assets                     469,662          577,822

Deferred income taxes, net                      3,740            2,958
Marketable securities                         205,380          118,096
Goodwill and other intangibles                  8,153            8,445
Other non-current assets                        7,480            1,273
Property and equipment, net                    22,714           18,401
                                        -------------   -------------
     Total assets                       $     717,129    $     726,995
                                        =============    =============

Liabilities and stockholders' equity

Current liabilities:
  Accounts payable and accrued
    liabilities                         $      31,029    $      43,667
  Accrued incentive compensation               19,123           27,045
  Deferred revenues                           254,334          261,300
                                        -------------    -------------
     Total current liabilities                304,486          332,012

Other liabilities                              14,205            9,569
                                        -------------    -------------
     Total liabilities                        318,691          341,581

Total stockholders' equity                    398,438          385,414
                                        -------------    -------------
     Total liabilities and stockholders'
       equity                           $     717,129    $     726,995
                                        =============    =============

                 THE CORPORATE EXECUTIVE BOARD COMPANY
                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (in thousands)
                              (Unaudited)
                                                   Six Months Ended
                                                       June 30,
                                                   2006       2005
                                                ---------   --------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                    $  34,882   $ 34,188
  Adjustments to reconcile net income to
    net cash flows provided by
    operating activities:
      Depreciation and amortization                 4,424      3,370
      Deferred income taxes                        21,960     17,222
      Share-based compensation                     13,099         --
      Excess tax benefits from share-based
        compensation arrangements(1)              (18,180)        --
      Amortization of marketable securities
        premiums, net                                (932)     1,240
      Changes in operating assets and
        liabilities:
          Membership fees receivable, net          43,416     40,442
          Deferred incentive compensation             460        960
          Prepaid expenses and other current
            assets                                 (4,791)      (873)
          Other non-current assets                 (6,206)        --
          Accounts payable and accrued
            liabilities                           (12,969)     3,004
          Accrued incentive compensation           (7,980)      (976)
          Deferred revenues                        (6,966)   (11,859)
          Other liabilities                         4,631        756
                                                ---------   --------
            Net cash flows provided by
              operating activities                 64,848     87,474
                                                ---------   --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment, net         (8,116)    (3,024)
  (Purchases) sales and maturities of
    marketable securities, net                   (194,787)    78,608
                                                ---------   --------
          Net cash flows (used in) provided
            by investing activities              (202,903)    75,584
                                                ---------   --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from the exercise of common
    stock options                                   2,630     44,905
  Proceeds from the issuance of common
    stock under the employee stock
    purchase plan                                     912        655
  Excess tax benefits from share-based
    compensation arrangements(1)                   18,180         --
  Purchase of treasury shares                     (58,363)   (27,534)
  Payment of dividends                            (23,954)    (7,862)
  Reimbursement of common stock offering
    costs                                              70         35
  Payment of common stock offering costs              (70)        (2)
                                                ---------   --------
          Net cash flows (used in) provided by
            financing activities                  (60,595)    10,197
                                                ---------   --------
NET (DECREASE) INCREASE IN CASH AND
  CASH EQUIVALENTS                               (198,650)   173,255

Cash and cash equivalents, beginning
  of period                                       424,276    113,996
                                                ---------   --------
Cash and cash equivalents, end of period        $ 225,626   $287,251
                                                =========   ========

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

(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 six months
     ended June 30, 2006 is to move $18.1 million of excess tax
     benefits from an operating cash flow to a cash flow from
     financing activities, leaving total cash flows unchanged.

    CONTACT: The Corporate Executive Board Company
             Timothy R. Yost, 202-777-5455
             heroldl@executiveboard.com
             www.executiveboard.com

    SOURCE: The Corporate Executive Board Company