The Corporate Executive Board Reports Second-Quarter Earnings of $0.41 Per Diluted Share and 30% Revenue Growth.WASHINGTON Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. -- The Corporate Executive Board Company (CEB CEB Chief Executives Board (United Nations) CEB Council of Europe Development Bank CEB Corporate Executive Board CEB Ceylon Electricity Board (Sri Lanka) ) (NASDAQ/NM:EXBD) today announced financial results for the second quarter and six months ended June June: see month. 30, 2005. Revenues for the second quarter increased 30.0% to $87.4 million from $67.2 million for the second quarter of 2004. Net income increased 33.9% to $17.0 million from $12.7 million. Earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the second quarter increased 28.1% to $0.41 from $0.32 for the second quarter of 2004. For the first six months of 2005, revenues were $169.0 million, a 28.8% increase from $131.2 million for the first half of 2004. Net income grew 38.3% to $34.2 million from $24.7 million. Earnings per diluted share for the first six months of 2005 increased 33.3% to $0.84 from $0.63 for the same prior-year period. Tom Monahan Monahan is a name of Gaelic origin, derived from manacháin, meaning "little monk".[1], and may refer to the following: People with the surname Monahan
Freeport, city (1990 pop. 25,115), Grand Bahama Island, Bahamas. A popular resort area, it developed out of a 1955 agreement between the Bahamian colonial government and a private development company to create a free port and McMoRan Copper & Gold Inc., Mitsubishi Motors North America Mitsubishi Motors North America, Inc. is the North American operation of Mitsubishi Motors Corporation, overseeing sales, manufacturing, finance, and research and development functions. , Inc., Old Republic International Corporation, Portugal Telecom Portugal Telecom (Euronext: PTC, NYSE: PT) is the biggest telecommunications operator in Portugal. It operates mainly in Portugal and Brazil. It also has a significant presence in Morocco, Guinea-Bissau, Cape Verde, Mozambique, Timor-Leste, Angola, Kenya, the People's Republic , and Virgin Group, Ltd joined their first CEB program in the quarter. These sources of growth are complemented by solid performance from our recent new program launches as well as steady price increases. You can see the total impact of our growth metrics in our 29.8% contract value growth for the quarter. "Today I am also delighted to announce two new research programs: the Advertising and Marketing Communications Marketing communications (or marcom) are messages and related media used to communicate with a market. Those who practice advertising, branding, direct marketing, graphic design, marketing, packaging, promotion, publicity, sponsorship, public relations, sales, sales Roundtable roundtable A conference or discussion involving several participants, often before an audience and open for questions. Cf Keynote address, Plenary session. and the Business Leadership Forum. The Advertising and Marketing Communications Roundtable serves the senior marketing executives responsible for strategy and deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. of advertising and marketing resources. Our inaugural research agenda is focused on best practices in managing a fragmenting media landscape, measuring the ROI (Return On Investment) The monetary benefits derived from having spent money on developing or revising a system. In the IT world, there are more ways to compute ROI than Carter has liver pills (and for those of you who never heard of that expression, it means a lot). and effectiveness of ad spending, and rethinking agency compensation models. The Roundtable benefited enormously from the advice and guidance of our charter members, including senior advertising and communications executives from Burger King Corporation, Cendant Cendant Corporation was a New York-based provider of business and consumer services, primarily within the real estate and travel industries. Although the company was based out of New York City, the majority of Cendant's headquarters employees were located in Parsippany-Troy Hills, Corporation, EBay (eBay, Inc., San Jose, CA, www.ebay.com) The major auction service on the Web. eBay popularized the concept of buying and selling online, and both individuals and commercial enterprises list items for sale. Inc., and The Gillette Company. This is the fourth program in our strong Sales and Marketing franchise. "The Business Leadership Forum serves the very senior executives who run lines of business at our member companies - division presidents and general managers. Our initial agenda focuses on such challenging topics as best practices in using customer segmentation to drive investment decisions, protecting profitability while implementing customer solution strategies, and tactical lessons from companies early to the challenges of establishing and managing China operations. Like those of its sister programs, the Forum's agenda was shaped by a stellar group of charter members, including senior general managers from BellSouth
Cummins Inc. (NYSE: CMI) is a maker of diesel and natural gas engines whose corporate headquarters is located in Columbus, Indiana. Inc., DuPont Dupont, DuPont, Du Pont, or du Pont may refer to: Companies
Monahan continued, "With our extensive network of companies and senior executives around the world, 34 research programs serving the large corporation, and close connection with our member executives' most urgent challenges, we believe that the CEB value proposition has never been more compelling. We continue to deliver high quality best-practices research, executive education, and unbiased decision-support - all through a very cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. model. I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in energized by the chance to partner with Jay McGonigle in his new Executive Chairman role, our leadership team, and our tremendous talent bench to continue the company's record of consistent, profitable, growth." Share Repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. During the six months ended June 30, 2005, the Company repurchased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 429,000 shares of its common stock at a total cost of approximately $27.5 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 has funded, and expects to continue to fund, its share repurchases with cash on hand and cash generated from operations. At June 30, 2005, the Company had $509.8 million in cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has and no debt. Outlook for 2005 The following statements summarize sum·ma·rize intr. & tr.v. sum·ma·rized, sum·ma·riz·ing, sum·ma·riz·es To make a summary or make a summary of. sum the Company's guidance for 2005. The Company is raising its target for annual revenue growth to a minimum of 27% accompanied ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. by continued modest expansion in the operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: within its 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 $91.5 million for the third quarter and $96.5 million for the fourth quarter of 2005. For 2005, the Company expects interest income of approximately $13 million, an effective income tax rate of approximately 33.5% and diluted weighted shares outstanding of approximately 41.0 million to 41.4 million. The Company is raising its guidance on earnings per diluted share for 2005 to $1.80. For the balance of 2005, the Company expects earnings per diluted share of $0.46 for the third quarter and $0.50 for the fourth quarter. The earnings per diluted share, interest income and weighted shares outstanding guidance includes only share repurchases made as of June 30, 2005. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 HEIR, UNCONDITIONAL. A term used in the civil law, adopted by the Civil Code of Louisiana. Unconditional heirs are those who inherit without any reservation, or without making an inventory, whether their acceptance be express or tacit. Civ. Code of Lo. art. 878. UNCONDITIONAL. service guarantee, various factors that could affect our estimated income tax rate or our ability to use our existing deferred tax assets, whether the Washington, D.C. Office of Tax and Revenue withdraws our QHTC QHTC Qualified High Technology Company (Washington, DC) status and possible volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the of our stock price. These and other factors are discussed more fully in the "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial 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 2004 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. . The forward-looking statements in this press release are made as of July 26, 2005 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 2,300 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)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Financial Highlights
Revenues $ 87,351 $ 67,198 $168,959 $131,177
Net income $ 17,046 $ 12,733 $ 34,188 $ 24,713
Basic earnings per share $ 0.43 $ 0.33 $ 0.87 $ 0.66
Diluted earnings per share $ 0.41 $ 0.32 $ 0.84 $ 0.63
Weighted average shares
outstanding:
Basic 39,926 38,151 39,475 37,697
Diluted 41,194 39,684 40,886 39,301
THE CORPORATE EXECUTIVE BOARD COMPANY
Operating Statistic and Financial Highlights
(in thousands, except per share data)
Three Months Ended
Selected June 30,
Growth -------------------
Rates 2005 2004
--------- --------- ---------
Operating Statistic
Contract value (1) (at period end) 29.8% $331,587 $255,507
Financial Highlights
Revenues 30.0% $ 87,351 $ 67,198
Cost of services 30,088 22,232
--------- ---------
Gross profit 57,263 44,966
Member relations and marketing 23,478 18,563
General and administrative 9,385 7,739
Depreciation 1,921 1,592
Stock option and related expenses - 408
--------- ---------
Income from operations 34.9% 22,479 16,664
Other income, net 3,154 2,341
--------- ---------
Income before provision for income taxes 25,633 19,005
Provision for income taxes 8,587 6,272
--------- ---------
Net income 33.9% $ 17,046 $ 12,733
========= =========
Basic earnings per share $ 0.43 $ 0.33
Diluted earnings per share 28.1% $ 0.41 $ 0.32
Weighted average shares outstanding
Basic 39,926 38,151
Diluted 41,194 39,684
Percentages of Revenues
Gross profit 65.6% 66.9%
Member relations and marketing 26.9% 27.6%
General and administrative 10.7% 11.5%
Income from operations 25.7% 24.8%
Net income 19.5% 18.9%
Six Months Ended
Selected June 30,
Growth -------------------
Rates 2005 2004
--------- --------- ---------
Operating Statistic
Contract value (1) (at period end)
Financial Highlights
Revenues 28.8% $168,959 $131,177
Cost of services 56,145 43,632
--------- ---------
Gross profit 112,814 87,545
Member relations and marketing 44,962 36,444
General and administrative 18,734 14,977
Depreciation 3,370 3,340
Stock option and related expenses 511 408
--------- ---------
Income from operations 39.7% 45,237 32,376
Other income, net 6,173 4,509
--------- ---------
Income before provision for income taxes 51,410 36,885
Provision for income taxes 17,222 12,172
--------- ---------
Net income 38.3% $ 34,188 $ 24,713
========= =========
Basic earnings per share $ 0.87 $ 0.66
Diluted earnings per share 33.3% $ 0.84 $ 0.63
Weighted average shares outstanding
Basic 39,475 37,697
Diluted 40,886 39,301
Percentages of Revenues
Gross profit 66.8% 66.7%
Member relations and marketing 26.6% 27.8%
General and administrative 11.1% 11.4%
Income from operations 26.8% 24.7%
Net income 20.2% 18.8%
(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, 2005 Dec. 31, 2004
-------------- -------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 287,251 $ 113,996
Marketable securities 18,260 50,292
Membership fees receivable, net 56,664 97,106
Deferred income taxes, net 24,133 26,121
Deferred incentive compensation 8,317 9,277
Prepaid expenses and other current
assets 8,581 8,107
-------------- -------------
Total current assets 403,206 304,899
Deferred income taxes, net 3,912 3,466
Marketable securities 204,275 252,689
Property and equipment, net 16,741 17,397
-------------- -------------
Total assets $ 628,134 $ 578,451
============== =============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued
liabilities $ 20,452 $ 17,450
Accrued incentive compensation 17,204 18,213
Deferred revenues 193,635 205,494
-------------- -------------
Total current liabilities 231,291 241,157
Other liabilities 10,589 9,833
-------------- -------------
Total liabilities 241,880 250,990
Stockholders' equity 386,254 327,461
-------------- -------------
Total liabilities and stockholders'
equity $ 628,134 $ 578,451
============== =============
THE CORPORATE EXECUTIVE BOARD COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
Six Months Ended
June 30,
--------------------
2005 2004
---------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 34,188 $ 24,713
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation 3,370 3,340
Deferred income taxes 17,222 11,388
Amortization of marketable securities
premiums, net 1,240 1,460
Changes in operating assets and
liabilities:
Membership fees receivable, net 40,442 19,778
Deferred incentive compensation 960 943
Prepaid expenses and other current
assets (873) (2,910)
Accounts payable and accrued
liabilities 3,004 2,996
Accrued incentive compensation (976) (1,724)
Deferred revenues (11,859) (4,186)
Other liabilities 756 4
---------- ---------
Net cash flows provided by
operating activities 87,474 55,802
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (3,024) (6,007)
Maturity and sale (purchase) of marketable
securities, net 78,608 (40,184)
---------- ---------
Net cash flows provided by
(used) in investing activities 75,584 (46,191)
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the exercise of common stock
options 44,905 55,175
Proceeds from the issuance of common stock
under the employee stock purchase plan 655 418
Purchase of treasury shares (27,534) (18,731)
Payment of dividends (7,862) (5,725)
Reimbursement of common stock offering costs 35 225
Payment of common stock offering costs (2) (121)
---------- ---------
Net cash flows provided by
financing activities 10,197 31,241
---------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 173,255 40,852
Cash and cash equivalents, beginning of period 113,996 118,568
---------- ---------
Cash and cash equivalents, end of period $287,251 $159,420
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