WASHINGTON, Aug. 4 /PRNewswire-FirstCall/ -- The Advisory Board Company (Nasdaq: ABCO) today announced financial results for the first quarter of its fiscal year ending March 31, 2010. Revenue for the quarter was $56.7 million, compared to $57.2 million in the first quarter of fiscal 2009. Net income was $4.2 million, or $0.27 per diluted share, compared to $6.3 million, or $0.36 per diluted share, for the same period a year ago. EBITDA, excluding foreign currency gain, was $7.3 million for the quarter, compared to $9.4 million in the first quarter of fiscal 2009. Contract value grew 0.2% to $232.8 million as of June 30, 2009, up from $232.3 million as of June 30, 2008.
Robert Musslewhite, Chief Executive Officer of The Advisory Board Company, commented, "Our overall performance for the quarter was in line with our expectations. Despite the ongoing budget pressures our members face, which continue to impact both renewals and sales, we are pleased that our contract value has remained steady, demonstrating our ability to address our members' most critical issues through programs that deliver tangible value."
Mr. Musslewhite concluded, "Our membership today faces unprecedented complexity. In addition to weathering the effects of the broader economy, these institutions must also track the health care reform debate and prepare for the implications of a range of possible outcomes. Each day, our network of more than 13,000 executives looks to our proven best practices, expert insight, and practical tools to navigate this demanding terrain. Our position as trusted advisor to this network is the result of our ongoing track record of providing meaningful impact on members' key issues, and we are confident that our work with them through this period will further strengthen our relationships and serve as a building-block for our continued growth and long-term success."
During the three months ended June 30, 2009, the Company repurchased 34,982 shares of its common stock at a total cost of approximately $0.9 million. To date the Company has repurchased 7,220,544 shares of its common stock at a total cost of approximately $304.9 million.
Outlook for the Remainder of Calendar Year 2009
As previously announced, the Company expects calendar year 2009 revenue to be within a few percentage points of calendar year 2008 revenue, EBITDA, excluding foreign currency gains and losses, in a range of approximately $27 million to $33 million, and earnings per diluted share in a range of approximately $0.90 to $1.20.
Non-GAAP Financial Measure
EBITDA is a non-GAAP financial measure provided as a complement to financial measures prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). As used in this release, the term "EBITDA" refers to a financial measure that we define as earnings before Other income, net, which includes interest income and foreign currency gain; income taxes; and depreciation and amortization. This non-GAAP measure may be considered in addition to financial measures prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP measures or 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. 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 because it enables the Company's management to evaluate projected operating results on a basis that allows for comparability without regard to changes arising from applicable tax rates, variability in interest income and foreign currency exchange rates, and periodic costs of certain capitalized tangible and intangible assets.
There are limitations associated with EBITDA, including that EBITDA does not reflect all changes in applicable tax rates, foreign currency exchange rates, or the periodic costs of certain capitalized tangible and intangible assets used in generating revenue in our business. Management compensates for these aspects and limitations of EBITDA by evaluating the costs of such tangible and intangible assets through other financial measure such as evaluating capital expenditures, and by also relying on the comparable GAAP financial measure of income from operations, which includes depreciation and amortization, and Net Income, which includes income taxes, interest income, foreign currency gains, and depreciation and amortization. A reconciliation of this non-GAAP measure to GAAP results is provided below.
Three Months Ended June 30, ---------------------- 2009 2008 ---- ---- Net income $4,188 $6,330 Provision for income taxes $2,186 $3,161 Other income, net (1) $(962) $(1,204) Depreciation and amortization $1,903 $1,083 ---------------------- EBITDA $7,315 $9,370
Web and Conference Call Information
The Company will hold a conference call to discuss its first quarter performance this evening, August 4, 2009, at 6:00 p.m. Eastern Standard Time. The conference call will be available via live web cast on the Company's web site at www.advisoryboardcompany.com in the section titled "Investor Relations" found under the tab "The Firm." To participate by telephone, the dial-in number is 866.271.6130 and the access code is 35125018. Investors are advised to dial-in at least five minutes prior to the call to register. The web cast will be archived for seven days: from 8:00 p.m. Tuesday, August 4, until 8:00 p.m. Tuesday, August 11, 2009.
About The Advisory Board Company
The Advisory Board Company provides best practices research, analysis, executive education and leadership development, business intelligence tools, and installation support services primarily to the health care industry, focusing on business strategy, operations, and general management issues. The Company provides best practices and research through discrete programs to a membership of approximately 2,800 organizations, including leading hospitals, health systems, pharmaceutical and biotech companies, health care insurers, medical device companies, colleges, universities, and other education institutions. Members of each program are typically charged a fixed annual fee and have access to an integrated set of services that may include best practice research studies, executive education seminars, customized research briefs, web-based access to the program's content database, and business intelligence tools.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on information available to the Company as of August 4, 2009, the date of this news release, as well as the Company's current projections, forecasts, and assumptions, and involve risks and uncertainties. You are hereby cautioned that these statements may be affected by certain factors, including those set forth below. Consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements, and reported results should not be considered as an indication of future performance. Factors that could cause actual results to differ materially from those indicated by forward-looking statements include, among others, changes in the financial condition of the health care industry, our dependence on renewal of membership-based services, the need to attract new business and retain current members and qualified personnel, new product development, competition, risks associated with our business intelligence tools and installation support tools, our ability to license technology from third parties, risks associated with anticipating market trends, industry consolidation, variability of quarterly operating results, possible volatility in the Company's stock price, and various factors related to income and other taxes, including whether the District of Columbia withdraws the Company's status as a Qualified High-Tech Company, as well as those risks and uncertainties described in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2009 and also disclosed from time to time in its subsequent reports on Form 10-Q and Form 8-K, which are available on the Company's website at www.advisoryboardcompany.com in the "Investor Relations" section and at the SEC's website at www.sec.gov. Additional information will also be set forth in the Company's report on Form 10-Q for the quarter ended June 30, 2009, which will be filed with the SEC in August 2009.
Accordingly, readers are cautioned not to place undue reliance on forward-looking statements made in this news release, which speak only as of the date of this news release, and the Company does not undertake to update these statements, whether as a result of circumstances or events that arise after the date they are made, new information, or otherwise.
THE ADVISORY BOARD COMPANY UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND OTHER OPERATING STATISTICS (In thousands, except per share data) Three Months Ended Selected June 30, Growth 2009 2008 Rates ---- ---- ----- Statements of Income Revenue $56,703 $57,217 -0.9% ------- ------- Cost of services (1) 30,064 28,554 Member relations and marketing (1) 12,557 12,398 General and administrative (1) 6,767 6,895 Depreciation and amortization 1,903 1,083 Income from operations 5,412 8,287 -34.7% Other income, net 962 1,204 Income before provision for income taxes 6,374 9,491 -32.8% Provision for income taxes (2,186) (3,161) ------ ------ Net income $4,188 $6,330 -33.8% ====== ====== Earnings per share Basic $0.27 $0.36 Diluted $0.27 $0.36 -25.0% Weighted average common Shares outstanding Basic 15,555 17,366 Diluted 15,609 17,720 Contract Value (at end of period) $232,848 $232,278 0.2% Percentages of Revenues Cost of services (1) 53.0% 49.9% Member relations and marketing (1) 22.1% 21.7% General and administrative (1) 11.9% 12.1% Depreciation and amortization 3.4% 1.9% Income from operations 9.5% 14.5% Net income 7.4% 11.1% (1) Effective April 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123R, "Share-Based Payment" (SFAS No. 123R), which provides the accounting rules for share-based compensation. During the three months ended June 30, 2009, the Company recognized approximately $0.9 million in cost of services, approximately $0.5 million in member relations and marketing, and approximately $1.5 million in general and administrative expense for share-based compensation related to the adoption of SFAS No. 123R and in employer taxes associated with the exercise of employee stock options. During the three months ended June 30, 2008, the Company recognized approximately $1.0 million in cost of services, approximately $0.6 million in member relations and marketing, and approximately $1.2 million in general and administrative expense for share-based compensation related to the adoption of SFAS No. 123R and in employer taxes associated with the exercise of employee stock options. The Company has recorded all these expenses in the same line items as other compensation paid to the relevant categories of employees. THE ADVISORY BOARD COMPANY CONSOLIDATED BALANCE SHEETS (In thousands) June 30, March 31, 2009 2009 ---- ---- (unaudited) ASSETS Current assets: Cash and cash equivalents $14,528 $23,746 Marketable securities 11,022 8,385 Membership fees receivable, net 124,552 116,739 Prepaid expenses and other current assets 4,727 5,113 Deferred income taxes, net 3,239 3,083 ----- ----- Total current assets 158,068 157,066 Property and equipment, net 32,724 34,156 Intangible assets, net 4,456 4,463 Goodwill 24,908 24,563 Deferred incentive compensation and other charges 27,183 26,737 Deferred income taxes, net of current portion 7,673 7,555 Other non-current assets 5,000 - Marketable securities 57,697 61,718 ------ ------ Total assets $317,709 $316,258 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Deferred revenues $151,934 $150,609 Accounts payable and accrued liabilities 34,333 35,777 Accrued incentive compensation 3,733 7,320 ----- ----- Total current liabilities 190,000 193,706 Long-term deferred revenues 19,084 19,869 Other long-term liabilities 3,616 3,784 ----- ----- Total liabilities 212,700 217,359 ------- ------- Stockholders' equity: Common stock 217 217 Additional paid-in capital 236,767 233,794 Retained earnings 138,680 134,492 Accumulated elements of comprehensive income 1,155 1,307 Treasury stock (271,810) (270,911) -------- -------- Total stockholders' equity 105,009 98,899 ------- ------ Total liabilities and stockholders' equity $317,709 $316,258 ======== ========
THE ADVISORY BOARD COMPANY UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Three Months Ended June 30, --------------------------- 2009 2008 ---- ---- Cash flows from operating activities: Net income $4,188 $6,330 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation 1,903 1,083 Amortization of intangible assets 268 192 Deferred income taxes (192) 288 Excess tax benefits from stock-based payments - (291) Stock-based Compensation expense 2,939 2,803 Amortization of Marketable securities premiums 150 224 Changes in operating assets and liabilities: Member fees receivable (7,813) (8,119) Prepaid expenses and other current assets 1,386 576 Deferred incentive compensation and other charges (446) (719) Deferred revenues 540 2,471 Accounts payable and accrued liabilities (1,789) 1,071 Accrued incentive compensation (3,587) (5,703) Other long-term liabilities (168) (113) ---- ---- Net cash flows (used in ) provided by operating activities (2,621) 93 ------ --- Cash flows from investing activities: Purchases of property and equipment (471) (5,768) Capitalized software development costs (261) (173) Cash paid for acquisition, net of cash acquired - (18,592) Redemption of marketable securities 3,500 33,969 Purchases of marketable securities (2,500) (5,579) Other investing activities (6,000) - ------ --- Net cash flows (used in) provided by investing activities (5,732) 3,857 ------ ----- Cash flows from financing activities: Proceeds on issuance of stock from exercise of stock options - 421 Repurchase of shares to satisfy minimum employee tax withholding (2) (390) Proceeds on issuance of stock under employee stock purchase plan 36 113 Excess tax benefits from share-based compensation arrangements - 291 Purchases of treasury stock (899) (8,807) ---- ------ Net cash flows used in financing activities (865) (8,372) ---- ------ Net decrease in cash and cash equivalents (9,218) (4,422) Cash and cash equivalents, beginning of period 23,746 17,907 ------ ------ Cash and cash equivalents, end of period $14,528 $13,485 ======= =======
|SOURCE The Advisory Board Company|
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