WASHINGTON, Aug. 4, 2015 /PRNewswire/ -- The Advisory
Board Company (NASDAQ: ABCO), a global technology, research, and
services company providing the leading cloud-based comprehensive
performance platform for the health care and higher education
industries, today announced financial results for the quarter ended
June 30, 2015.
Highlights from the second quarter of 2015 include (All
comparisons, unless otherwise noted, are to the quarter ended
June 30, 2014):
- Revenue of $184.7 million, an
increase of 30%
- Adjusted revenue of $191.3
million, an increase of 35%
- Contract value of $741.7 million,
an increase of 35%
- Adjusted EBITDA of $47.0 million,
an increase of 96%
- Non-GAAP earnings per diluted share of $0.40, an increase of 33%
Robert Musslewhite, Chairman and
Chief Executive Officer of The Advisory Board Company, commented,
'The company continues to experience strong growth and momentum, as
highlighted by our 35% adjusted revenue growth rate and our 96%
adjusted EBITDA growth rate for the quarter. Our proven
formula of renewable, scalable programs continues to yield solid
revenue growth, robust earnings growth, and compelling margin
expansion. As always, our focus on member impact drives our
success, and we continue to deliver strong returns to each of our
members and to the broader health care and higher education
industries. Our 5,200 members regularly affirm that, and the
93% member renewal rate we earned this year, the highest in our
history, is a testament to the positive impact our work has on
their most pressing issues."
Mr. Musslewhite continued, "Growth is a function of innovation,
and, as always, we continue to innovate. I am pleased to
announce two new product launches, Audience Rx in health care and
Navigate in higher education. Audience Rx is a renewable,
cloud-based technology offering that provides our health care
members a cutting-edge solution to enable data-driven, targeted
digital marketing that will equip them with the capabilities that
large consumer brands use to engage and drive loyalty with their
customers. The solution helps hospitals understand their data
on patient interactions and better connect with their communities
by unlocking insights about their relevant audience segments
customized to health needs."
Mr. Musslewhite concluded, "Navigate is also a renewable,
cloud-based technology product that provides community colleges a
student success solution targeted specifically to the challenges
facing their unique student bodies. The average community
college loses 50% of student applicants between the point of
student application and the first day of class due to challenges
with the college transition. Navigate initially acts as a
personal compass for students during onboarding, helping them pick
a program based on job data, creating an academic plan that
maximizes their chance of graduating, and developing a personalized
school schedule that helps balance school and life. The platform
then stays with students throughout their time in college, acting
as the term-over-term interface between the college and student and
helping students succeed and graduate. Both new programs are off to
a strong start, and we are excited about the impact they will have
for our members."
Second Quarter Financial Review
Revenue increased 30% to $184.7
million in the quarter ended June 30,
2015 up from to $141.8 million
for the quarter ended June 30, 2014.
Adjusted revenue, which adjusts for the effect on revenue of fair
value adjustments to acquired deferred revenue, increased 35% to
$191.3 million for the quarter ended
June 30, 2015, up from $141.8 million for the quarter ended June 30, 2014. Contract value increased 35%
to $741.7 million as of June 30, 2015, up from $548.4 million as of June
30, 2014.
Net income attributable to common stockholders was $8.7 million, or $0.20 per diluted share, for the quarter ended
June 30, 2015, compared to net loss
attributable to common stockholders of $3.2
million, or $0.09 per diluted
share, for the quarter ended June 30,
2014. Adjusted net income increased 56% to $17.1 million for the quarter ended June 30, 2015, up from $11.0 million for the quarter ended June 30, 2014. Non-GAAP earnings per diluted
share increased 33% to $0.40 for the
quarter ended June
30, 2015 up from $0.30
for the quarter ended June 30,
2014.
Adjusted EBITDA increased 96% to $47.0
million for the quarter ended June
30, 2015, up from $24.0
million for the quarter ended June
30, 2014.
Adjusted revenue, adjusted net income, non-GAAP earnings per
diluted share, and adjusted EBITDA are non-GAAP financial
measures.
Year-to-Date Financial Review
Revenue increased 30% to $364.5
million for the six month period ended June 30, 2015, up from $279.8 million for the six month period ended
June 30, 2014. Adjusted revenue
increased 35% to $377.0 million for
the six month period ended June 30,
2015, up from $279.8 million
for the six month period ended June 30,
2014. Net loss attributable to common stockholders was
$15.0 million, or $0.36 per diluted share, for the six month period
ended June 30, 2015, compared to net
income attributable to common stockholders of $5.1 million, or $0.14 per diluted share, for the six month period
ended June 30, 2014. Adjusted EBITDA
was $86.5 million for the six month
period ended June 30, 2015, up from
$50.0 million for the six month
period ended June 30, 2014. Adjusted
net income was $30.1 million for the
2015 six month period ended June 30,
2015, up from $23.7 million
for the six month period ended June 30,
2014. Non-GAAP earnings per diluted share were $0.71 for the six month period ended June 30, 2015, up from $0.64 for the six month period ended June 30, 2014.
Outlook for Calendar Year
2015
The Company is updating its annual financial guidance. For
calendar year 2015, the Company expects:
- Adjusted revenue to be in a range of approximately $780 million to $790 million, revised from the
previous range of approximately $780 million
to $800 million
- Adjusted EBITDA to be in a range of approximately $170 million to $175 million, revised from the
previous range of approximately $170 million
to $180 million
- Non-GAAP earnings per diluted share to be in a range of
approximately $1.30 to $1.37, revised
from the previous range of approximately $1.30 to $1.43
- Adjusted effective tax rate (a non-GAAP financial measure) to
be in a range of approximately 45% to 47%
The Company is also providing financial guidance for the quarter
ending September 30, 2015. For the
quarter ending September 30, 2015,
the Company expects:
- Adjusted revenue to be in a range of approximately $187 million to $191 million
- Adjusted EBITDA to be in a range of approximately $27 million to $29 million
- Non-GAAP earnings per diluted share to be in a range of
approximately $0.12 to $0.15
Conference Call Information
As previously announced, the Company will hold a conference call
to discuss its second quarter performance this evening,
August 4, 2015, at 5:30 p.m. Eastern Time. The conference call will
be available via live webcast on the Company's website at
www.advisory.com/IR. To participate by telephone, the dial-in
number is 888.336.7150. Participants are advised to dial in at
least five minutes prior to the call to register. The webcast will
be archived for seven days from 8:00 p.m.
Eastern Time on Tuesday, August 4,
2015, until 11:00 p.m. Eastern
Time on Tuesday, August 11,
2015. The Company invites all interested parties to attend
the conference call, including the lenders under the Company's
senior secured credit facilities.
A supplemental presentation of information complementary to the
information presented in this release and that will be discussed on
the conference call will be made available on the Company's website
at www.advisory.com/IR prior to the conference call and will be
archived for the same duration as the webcast.
About the Advisory Board Company
The Advisory Board Company is the leading provider of
insight-driven technology, research,
and services for organizations in transforming
industries. Through its innovative membership model, the Company
collaborates with more than 230,000 leaders at 5,200 member
organizations to elevate performance and solve their most pressing
problems. The Company provides strategic guidance, actionable
insights, cloud-based software solutions, and comprehensive
implementation and management services. For more information,
visit www.advisory.com.
Non-GAAP Financial Measures
This news release presents information about the Company's
adjusted revenue, adjusted net income, non-GAAP earnings per
diluted share, adjusted EBITDA, adjusted effective tax rate, and
adjusted weighted average common shares outstanding-diluted, which
are non-GAAP financial measures provided as a complement to the
results provided in accordance with accounting principles generally
accepted in the United States of
America ("GAAP"). A reconciliation of each of the foregoing
historical non-GAAP financial measures to the most directly
comparable historical GAAP financial measures is provided in the
accompanying tables found at the end of this release for each of
the fiscal periods indicated.
Caution Regarding Forward-Looking Statements
Statements in this news release that relate to future results
and events are forward-looking statements and are based on the
Company's expectations as of the date of this news release. In some
cases, you can identify these statements by such forward-looking
words as "anticipate," "believe," "estimate," "expect," "guidance,"
"intend," "may," "outlook," "plan," "potential," "should," "will,"
"would," or similar words or expressions. Forward-looking
statements in this news release include the Company's expectations
regarding its performance and results for fiscal 2015 with respect
to adjusted revenue, adjusted EBITDA, non-GAAP earnings per
diluted share, and adjusted effective tax rate.
Actual results and events in future periods may differ
materially from those expressed or implied by these forward-looking
statements because of a number of risks, uncertainties, and other
factors, including those relating to: factors that adversely
affect the financial condition of the health care and higher
education industries; federal and state law and regulations
governing the health care and higher education industries and our
members' and our respective compliance with those applicable laws
and regulations; the Company's ability to sustain high renewal
rates on its memberships; maintenance of the Company's reputation
and expansion of its name recognition; the Company's ability to
offer new and valuable products and services; effects of
competition; the Company's ability to maintain a highly-skilled
workforce; unsuccessful design or implementation of software or
delivery of consulting and management services; delays in
generating revenue; effects of federal and state privacy and
security laws and cyber attacks and other data security breaches;
compliance with federal regulations governing electronic
transactions; service disruptions and operational or security
failures; ability to collect and maintain member and third party
data and to obtain proper permissions and waivers for use and
disclosure of information received from members or on their behalf;
liability for failure to provide accurate information or for
deficient submissions to third-party payors; compliance with
federal and state laws governing healthcare fraud and abuse or
reimbursement; maintenance of third-party providers and strategic
alliances and entry into new alliances; licensing and integration
of third-party technologies and data; protection of the Company's
intellectual property; claims of infringement, misappropriation, or
violation of proprietary rights of third parties; limitations
associated with use of open source technology; changes to estimates
and assumptions used to prepare the Company's consolidated
financial statements; any significant increase in bad debt in
excess of recorded estimates; failure to realize the anticipated
benefits of the Royall acquisition; diversion of management's
attention from operations by activities focused on the integration
of Royall's business; business and financial risk associated with
the pursuit of acquisition opportunities; delays in the delivery by
Evolent Health to the Company of its financial statements; any
significant impairment of the Company's goodwill; the Company's
ability to realize a return on its strategic investments; the level
of the Company's debt service obligations and restrictions on its
operations under debt covenants; potential imposition of sales and
use taxes on sales of the Company's services; the Company's ability
to realize fully its deferred tax assets; inherent limitations in,
and the potential impact of any failure to maintain, effective
internal control over financial reporting; effects of issuance of
additional capital stock; and provisions in the Company's charter
and bylaws that could discourage takeover attempts.
This list of risks, uncertainties, and other factors is not
complete. The Company discusses some of these matters more fully,
as well as certain risk factors that could affect the Company's
business, financial condition, results of operations, and
prospects, in its filings with the Securities and Exchange
Commission, including the Company's annual report on form 10-KT for
the transition period ended December 31,
2014 and its quarterly reports on Form 10-Q and current
reports on Form 8-K. These filings are available for review through
the Securities and Exchange Commission's website at www.sec.gov.
Any or all forward-looking statements the Company makes may turn
out to be wrong, and can be affected by inaccurate assumptions the
Company might make or by known or unknown risks, uncertainties, and
other factors, including those identified in this news release.
Accordingly, you should not place undue reliance on the
forward-looking statements made in this news release, which speak
only as of its date. The Company does not undertake to update any
of its forward-looking 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
|
|
Six Months
Ended
|
|
Selected
|
|
|
|
|
June
30,
|
|
Growth
|
|
June
30,
|
|
Growth
|
|
|
|
|
2015
|
|
2014
|
|
Rates
|
|
2015
|
|
2014
|
|
Rates
|
|
Statements
of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
(1)
|
$ 184,661
|
|
$ 141,820
|
|
30.2%
|
|
$ 364,456
|
|
$ 279,821
|
|
30.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
services, excluding depreciation and amortization (2)
(3)
|
92,221
|
|
74,218
|
|
|
|
187,528
|
|
141,413
|
|
|
|
Member
relations and marketing (2)
|
29,375
|
|
26,576
|
|
|
|
60,101
|
|
52,988
|
|
|
|
General and
administrative (2) (4) (5)
|
30,853
|
|
22,712
|
|
|
|
62,527
|
|
41,455
|
|
|
|
Depreciation
and amortization (6)
|
19,499
|
|
9,078
|
|
|
|
36,573
|
|
17,546
|
|
|
|
Operating
income
|
12,713
|
|
9,236
|
|
|
|
17,727
|
|
26,419
|
|
|
|
Other (expense)
income
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(5,154)
|
|
-
|
|
|
|
(10,766)
|
|
-
|
|
|
|
Other (expense)
income, net
|
(128)
|
|
710
|
|
|
|
(1,247)
|
|
1,442
|
|
|
|
Loss on financing
activities
|
-
|
|
-
|
|
|
|
(17,398)
|
|
-
|
|
|
|
|
|
Total other
(expense) income, net
|
(5,282)
|
|
710
|
|
|
|
(29,411)
|
|
1,442
|
|
|
|
Income (loss) before
provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
and equity
in income / (loss) of unconsolidated entities
|
7,431
|
|
9,946
|
|
|
|
(11,684)
|
|
27,861
|
|
|
|
Provision for
income taxes
|
(2,716)
|
|
(3,933)
|
|
|
|
(4,910)
|
|
(10,830)
|
|
|
|
Equity in
income / (loss) of unconsolidated entities
|
4,000
|
|
(2,150)
|
|
|
|
1,621
|
|
(4,881)
|
|
|
|
Net income (loss)
before allocation to noncontrolling interest
|
8,715
|
|
3,863
|
|
|
|
(14,973)
|
|
12,150
|
|
|
|
Net loss and
accretion to redemption value of noncontrolling interest
|
-
|
|
(7,040)
|
|
|
|
-
|
|
(7,040)
|
|
|
|
Net income (loss) attributable to common
stockholders
|
$ 8,715
|
|
$ (3,177)
|
|
|
|
$ (14,973)
|
|
$ 5,110
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
income attributable to common stockholders per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.21
|
|
$ (0.09)
|
|
|
|
$ (0.36)
|
|
$
0.14
|
|
|
|
Diluted
|
$
0.20
|
|
$ (0.09)
|
|
|
|
$ (0.36)
|
|
$
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
42,440
|
|
36,413
|
|
|
|
41,686
|
|
36,310
|
|
|
|
Diluted
|
42,914
|
|
36,413
|
|
|
|
41,686
|
|
37,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Value (at end of period)
|
$ 741,673
|
|
$ 548,379
|
|
35.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentages
of Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
services, excluding depreciation and amortization (2)
(3)
|
49.9%
|
|
52.3%
|
|
|
|
51.5%
|
|
50.5%
|
|
|
|
Member
relations and marketing (2)
|
15.9%
|
|
18.7%
|
|
|
|
16.5%
|
|
18.9%
|
|
|
|
General and
administrative (2) (4) (5)
|
16.7%
|
|
16.0%
|
|
|
|
17.2%
|
|
14.8%
|
|
|
|
Depreciation
and amortization (6)
|
10.6%
|
|
6.4%
|
|
|
|
10.0%
|
|
6.3%
|
|
|
|
Operating
income
|
6.9%
|
|
6.5%
|
|
|
|
4.9%
|
|
9.4%
|
|
|
|
Net income
attributable to common stockholders
|
4.7%
|
|
-2.2%
|
|
|
|
-4.1%
|
|
1.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts include
effect on revenue of fair value adjustments to acquisition-related
deferred revenue, as follows:
|
|
|
Revenue
|
(6,617)
|
|
-
|
|
|
|
(12,499)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Amounts include
stock-based compensation, as follows:
|
|
|
Cost of
services
|
2,566
|
|
2,089
|
|
|
|
4,458
|
|
3,471
|
|
|
|
Member relations and
marketing
|
1,455
|
|
1,081
|
|
|
|
2,601
|
|
1,924
|
|
|
|
General and
administrative
|
4,610
|
|
2,371
|
|
|
|
7,977
|
|
4,569
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Amounts include fair
value adjustments of acquisition-related earn-out liabilities, as
follows:
|
|
|
Cost of
services
|
(1,427)
|
|
(100)
|
|
|
|
(1,083)
|
|
(4,200)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
Amounts include
acquisition and transaction related costs, as follows:
|
|
|
General and
administrative
|
961
|
|
268
|
|
|
|
6,610
|
|
268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
Amounts include
reversal of vacation accrual charge related to change in fiscal
year as follows:
|
|
|
General and
administrative
|
-
|
|
-
|
|
|
|
(850)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6)
|
Amounts include
amortization of acquisition-related intangibles, as
follows:
|
|
|
Depreciation and
amortization
|
8,031
|
|
2,401
|
|
|
|
15,580
|
|
4,728
|
|
THE ADVISORY BOARD
COMPANY
|
CONSOLIDATED
BALANCE SHEETS
|
(In
thousands)
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2015
|
|
2014
|
|
|
(unaudited)
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
49,550
|
|
$
72,936
|
Marketable
securities, current
|
|
-
|
|
14,714
|
Membership fees
receivable, net
|
|
603,173
|
|
539,061
|
Prepaid expenses
and other current assets
|
|
34,033
|
|
23,254
|
Deferred income
taxes, current
|
|
16,035
|
|
14,695
|
Total current
assets
|
|
702,791
|
|
664,660
|
|
|
|
|
|
Property and
equipment, net
|
|
178,690
|
|
135,107
|
Intangible
assets, net
|
|
290,744
|
|
38,973
|
Deferred
incentive compensation and other charges
|
|
86,351
|
|
86,045
|
Goodwill
|
|
840,809
|
|
186,895
|
Investments in
unconsolidated entities
|
|
5,680
|
|
9,316
|
Other
non-current assets
|
|
5,698
|
|
5,370
|
Total
assets
|
|
$
2,110,763
|
|
$
1,126,366
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Deferred
revenue, current
|
|
$
563,349
|
|
$
501,785
|
Accounts payable
and accrued liabilities
|
|
71,191
|
|
80,284
|
Accrued
incentive compensation
|
|
20,042
|
|
32,073
|
Debt,
current
|
|
27,880
|
|
-
|
Total current
liabilities
|
|
682,462
|
|
614,142
|
|
|
|
|
|
Deferred
revenue, net of current portion
|
|
168,854
|
|
167,014
|
Deferred income
taxes, net of current portion
|
|
121,899
|
|
9,855
|
Debt, net of
current portion
|
|
536,395
|
|
-
|
Other long-term
liabilities
|
|
10,136
|
|
15,304
|
Total
liabilities
|
|
1,519,746
|
|
806,315
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common
stock
|
|
425
|
|
361
|
Additional
paid-in capital
|
|
727,289
|
|
442,528
|
Accumulated
deficit
|
|
(137,893)
|
|
(122,920)
|
Accumulated
other comprehensive income
|
|
1,196
|
|
82
|
Total
stockholders' equity
|
|
591,017
|
|
320,051
|
|
|
|
|
|
Total
liabilities and stockholders' equity
|
|
$
2,110,763
|
|
$
1,126,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE ADVISORY BOARD
COMPANY
|
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
|
|
Six Months
Ended June 30,
|
|
|
2015
|
|
2014
|
Cash flows
from operating activities:
|
|
|
|
|
Net (loss)
income before allocation to noncontrolling interest
|
|
$ (14,973)
|
|
$ 12,150
|
Adjustments to
reconcile net (loss) income before allocation to
|
|
|
|
|
noncontrolling
interest to net cash provided by operating activities:
|
|
|
|
|
Depreciation and
amortization
|
|
36,573
|
|
17,546
|
Loss on
financing activities
|
|
17,398
|
|
-
|
Amortization of
debt issuance costs
|
|
703
|
|
-
|
Deferred income
taxes
|
|
11,356
|
|
9,806
|
Excess tax
benefits from stock-based awards
|
|
(2,483)
|
|
(7,900)
|
Stock-based
compensation expense
|
|
15,036
|
|
9,964
|
Amortization of
marketable securities premiums
|
|
-
|
|
1,235
|
(Gain) loss on
investment in common stock warrants
|
|
(70)
|
|
180
|
Equity in
(income) loss of unconsolidated entities
|
|
(1,621)
|
|
4,881
|
Changes in
operating assets and liabilities (net of the effect of
acquisition):
|
|
|
|
|
Membership fees
receivable
|
|
(34,872)
|
|
(10,953)
|
Prepaid expenses
and other current assets
|
|
(178)
|
|
(5,336)
|
Deferred
incentive compensation and other charges
|
|
870
|
|
3,801
|
Other
non-current assets
|
|
(258)
|
|
-
|
Deferred
revenue
|
|
45,104
|
|
(7,406)
|
Accounts payable
and accrued liabilities
|
|
(10,949)
|
|
1,069
|
Acquisition-related earn-out
payments
|
|
(1,948)
|
|
(2,798)
|
Accrued
incentive compensation
|
|
(12,031)
|
|
(13,700)
|
Other long-term
liabilities
|
|
(5,168)
|
|
(7,207)
|
Net cash flows
provided by operating activities
|
|
42,489
|
|
5,332
|
Cash flows
from investing activities:
|
|
|
|
|
Purchases of
property and equipment
|
|
(23,783)
|
|
(20,331)
|
Capitalized
external use software development costs
|
|
(2,181)
|
|
(2,689)
|
Cash paid for
acquisitions, net of cash acquired
|
|
(744,193)
|
|
(25,830)
|
Cash paid for
investment in unconsolidated entity
|
|
(3,006)
|
|
-
|
Redemptions of
marketable securities
|
|
14,714
|
|
81,669
|
Purchases of
marketable securities
|
|
-
|
|
(32,510)
|
Net cash flows
(used in) provided by investing activities
|
|
(758,449)
|
|
309
|
Cash flows
from financing activities:
|
|
|
|
|
Proceeds from
debt, net
|
|
1,280,292
|
|
-
|
Pay down of
debt
|
|
(732,189)
|
|
-
|
Debt issuance
costs
|
|
(2,568)
|
|
-
|
Proceeds from
issuance of common stock, net of selling costs
|
|
148,786
|
|
-
|
Proceeds from
issuance of common stock from exercise of stock options
|
|
3,014
|
|
5,810
|
Withholding of
shares to satisfy minimum employee tax withholding
|
|
(6,007)
|
|
(7,735)
|
Proceeds from
issuance of stock under employee stock purchase plan
|
|
263
|
|
296
|
Contributions
from noncontrolling interest
|
|
-
|
|
200
|
Acquisition-related earn-out
payments
|
|
(1,500)
|
|
-
|
Excess tax
benefits from stock-based awards
|
|
2,483
|
|
7,900
|
Purchases of
treasury stock
|
|
-
|
|
(23,772)
|
Net cash flows
provided by (used in) financing activities
|
|
692,574
|
|
(17,301)
|
|
|
|
|
|
Net decrease
in cash and cash equivalents
|
|
(23,386)
|
|
(11,660)
|
Cash and cash
equivalents, beginning of period
|
|
72,936
|
|
52,717
|
Cash and cash
equivalents, end of period
|
|
$ 49,550
|
|
$
41,057
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures
This news release presents information about the Company's
adjusted revenue, adjusted EBITDA, adjusted net income, non-GAAP
earnings per diluted share, adjusted effective tax rate, and
adjusted weighted average common shares outstanding-diluted, which
are non-GAAP financial measures provided as a complement to the
results provided in accordance with GAAP.
A reconciliation of each of the foregoing historical non-GAAP
financial measures to the most directly comparable historical GAAP
financial measures is provided below for each of the fiscal periods
indicated. It is not practicable to provide a reconciliation of
forecasted adjusted revenue, adjusted EBITDA, adjusted net income,
non-GAAP earnings per diluted share, or adjusted effective tax rate
to the most directly comparable GAAP financial measures because
certain items required for the forecast of such GAAP financial
measures, including fair value adjustments to acquisition-related
earn-out liabilities, equity in income (loss) of
unconsolidated entity, and gains and losses on investment in common
stock warrants, cannot reasonably be estimated or predicted at this
time.
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Revenue
|
$ 184,661
|
|
$ 141,820
|
|
$ 364,456
|
|
$ 279,821
|
Effect on revenue of
fair value adjustments to acquisition-related deferred
revenue
|
6,617
|
|
—
|
|
12,499
|
|
—
|
Adjusted revenue
|
$ 191,278
|
|
$ 141,820
|
|
$ 376,955
|
|
$ 279,821
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders
|
$ 8,715
|
|
$ (3,177)
|
|
$ (14,973)
|
|
$ 5,110
|
Effect on revenue of
fair value adjustments to acquisition-related deferred
revenue
|
6,617
|
|
—
|
|
12,499
|
|
—
|
Equity in
(income) loss of unconsolidated entities
|
(4,000)
|
|
2,150
|
|
(1,621)
|
|
4,881
|
Accretion of
noncontrolling interest to redemption value
|
—
|
|
7,040
|
|
—
|
|
7,040
|
Provision for income
taxes
|
2,716
|
|
3,933
|
|
4,910
|
|
10,830
|
Interest
expense
|
5,154
|
|
—
|
|
10,766
|
|
—
|
Other expense
(income), net
|
128
|
|
(710)
|
|
1,247
|
|
(1,442)
|
Loss on financing
activities
|
—
|
|
—
|
|
17,398
|
|
—
|
Depreciation and
amortization
|
19,499
|
|
9,078
|
|
36,573
|
|
17,546
|
Acquisition and
similar transaction charges
|
961
|
|
268
|
|
6,610
|
|
268
|
Fair value
adjustments to acquisition-related earn-out liabilities
|
(1,427)
|
|
(100)
|
|
(1,083)
|
|
(4,200)
|
Vacation accrual
adjustment
|
—
|
|
—
|
|
(850)
|
|
—
|
Stock-based
compensation expense
|
8,631
|
|
5,541
|
|
15,036
|
|
9,964
|
Adjusted EBITDA
|
$ 46,994
|
|
$ 24,023
|
|
$ 86,512
|
|
$ 49,997
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common stockholders
|
$ 8,715
|
|
$ (3,177)
|
|
$ (14,973)
|
|
$ 5,110
|
Effect of adjusted
tax rate on net (loss) income
|
(494)
|
|
—
|
|
10,130
|
|
—
|
Effect on revenue of
fair value adjustments to acquisition-related deferred revenue, net
of adjusted tax rate
|
3,759
|
|
—
|
|
7,047
|
|
—
|
Equity in (income)
loss of unconsolidated entities
|
(4,000)
|
|
2,150
|
|
(1,621)
|
|
4,881
|
Accretion of
noncontrolling interest to redemption value
|
—
|
|
7,040
|
|
—
|
|
7,040
|
Amortization of
acquisition-related intangibles, net of adjusted tax
rate
|
4,562
|
|
1,452
|
|
8,782
|
|
2,883
|
Loss on financing
activities, net of adjusted tax rate
|
—
|
|
—
|
|
9,725
|
|
—
|
Acquisition and
similar transaction charges, net of adjusted tax rate
|
546
|
|
162
|
|
3,704
|
|
162
|
Fair value
adjustments to acquisition-related earn-out liabilities, net of
adjusted tax rate
|
(811)
|
|
(61)
|
|
(619)
|
|
(2,583)
|
(Gain) loss on
investment in common stock warrants, net of adjusted tax
rate
|
(40)
|
|
108
|
|
(40)
|
|
108
|
Vacation accrual
adjustment, net of adjusted tax rate
|
—
|
|
—
|
|
(475)
|
|
—
|
Stock-based
compensation expense, net of adjusted tax rate
|
4,902
|
|
3,351
|
|
8,482
|
|
6,071
|
Adjusted net
income
|
$ 17,139
|
|
$ 11,025
|
|
$ 30,142
|
|
$ 23,672
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to common shareholders per share - Diluted
|
$ 0.20
|
|
$ (0.09)
|
|
$ (0.36)
|
|
$ 0.14
|
Effect of adjusted
tax rate on net (loss) income
|
(0.01)
|
|
—
|
|
0.24
|
|
—
|
Effect on revenue of
fair value adjustments to acquisition-related deferred revenue, net
of adjusted tax rate
|
0.09
|
|
—
|
|
0.17
|
|
—
|
Equity in (income)
loss of unconsolidated entities
|
(0.09)
|
|
0.06
|
|
(0.04)
|
|
0.13
|
Accretion of
noncontrolling interest to redemption value
|
—
|
|
0.19
|
|
—
|
|
0.19
|
Amortization of
acquisition-related intangibles, net of adjusted tax
rate
|
0.11
|
|
0.04
|
|
0.21
|
|
0.08
|
Loss on financing
activities, net of adjusted tax rate
|
—
|
|
—
|
|
0.23
|
|
—
|
Acquisition and
similar transaction charges, net of adjusted tax rate
|
0.01
|
|
0.01
|
|
0.09
|
|
—
|
Fair value
adjustments to acquisition-related earn-out liabilities, net of
adjusted tax rate
|
(0.02)
|
|
—
|
|
(0.02)
|
|
(0.07)
|
Gain (loss) on
investment in common stock warrants, net of adjusted tax
rate
|
—
|
|
—
|
|
—
|
|
—
|
Vacation accrual
adjustment, net of adjusted tax rate
|
—
|
|
—
|
|
(0.01)
|
|
—
|
Stock-based
compensation expense, net of adjusted tax rate
|
0.11
|
|
0.09
|
|
0.20
|
|
0.17
|
Non-GAAP earnings per
diluted share
|
$ 0.40
|
|
$ 0.30
|
|
$ 0.71
|
|
$ 0.64
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
36.5%
|
|
39.5%
|
|
(42.0%)
|
|
38.9%
|
Effect on tax rate of
Washington, D.C. tax law change, including write-off of Washington,
D.C. income tax credits
|
—
|
|
—
|
|
91.3%
|
|
—
|
Effect on tax rate of
loss on financing activities
|
0.9%
|
|
—
|
|
(8.5%)
|
|
—
|
Effect on tax rate of
unconsolidated equity method investment related FIN 48
liability
|
(3.5%)
|
|
—
|
|
—
|
|
—
|
Effect on tax rate of
Royall acquisition costs and other acquisition-related tax
items
|
9.3%
|
|
—
|
|
2.8%
|
|
—
|
Adjusted effective tax
rate
|
43.2%
|
|
39.5%
|
|
43.6%
|
|
38.9%
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding – Diluted
|
42,914
|
|
36,413
|
|
41,686
|
|
37,125
|
Diluted shares
outstanding (1)
|
—
|
|
628
|
|
555
|
|
—
|
Adjusted weighted
average common shares outstanding – Diluted
|
42,914
|
|
37,041
|
|
42,241
|
|
37,125
|
|
(1) For non-GAAP
purposes the Company has net income, therefore has included diluted
shares in its calculation of non-GAAP EPS.
|
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To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/the-advisory-board-company-reports-results-for-quarter-ended-june-30-2015-300123639.html
SOURCE The Advisory Board Company