[July 28, 2015] |
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CEB Reports Second Quarter Results and Updates 2015 Guidance
CEB Inc. ("CEB" or the "Company") (NYSE: CEB) today announced financial
results for the second quarter ended June 30, 2015. Revenue increased
0.7% to $232.0 million in the second quarter of 2015 from $230.4 million
in the second quarter of 2014. Net income in the second quarter of 2015
was $23.2 million, or $0.69 per diluted share, compared to a net loss of
$6.4 million, or $0.19 per diluted share, in the same period of 2014.
Included in net income for the second quarter of 2015 was $4.8 million
of pre-tax debt extinguishment costs associated with the June 2015
refinancing of the Company's senior secured credit facility and issuance
of senior notes and a $4.7 million pre-tax net non-operating foreign
currency loss. Included in net loss for the second quarter of 2014 was a
$39.7 million pre-tax impairment loss associated with nondeductible
intangible assets and goodwill of Personnel Decision Research
Institutes, Inc. ("PDRI"), a $6.6 million pre-tax gain related to a cost
method investment, and a $2.0 million pre-tax net non-operating foreign
currency loss. Adjusted net income was $40.0 million and Non-GAAP
diluted earnings per share were $1.19 in the second quarter of 2015
compared to $27.4 million and $0.81 in the same period of 2014,
respectively.
In the first six months of 2015, revenue increased 3.1% to $453.6
million from $439.9 million in the first six months of 2014. Net income
in the first six months of 2015 was $42.3 million, or $1.25 per diluted
share, compared to $1.2 million, or $0.04 per diluted share, in the same
period of 2014. Included in net income for the first six months of 2015
was $4.8 million of pre-tax debt extinguishment costs as described above
and a $1.5 million pre-tax net non-operating foreign currency gain.
Included in net income for the first six months of 2014 was a $39.7
million pre-tax impairment loss associated with PDRI, a $6.6 million
pre-tax gain related to a cost method investment, and a $2.9 million
pre-tax net non-operating foreign currency loss. Adjusted net income was
$64.5 million and Non-GAAP diluted earnings per share were $1.91 in the
first six months of 2015 compared to $46.5 million and $1.36 in the same
period of 2014, respectively.
"We continued to make progress on our key priorities in the second
quarter - although gaps in planned staffing and slippage in some larger
contracts have affected the timing of bookings across the year," said
Tom Monahan, Chairman and CEO. "At the same time, we delivered strong
margin expansion, and our tax planning efforts produced initial
benefits. We also made changes to our capital structure and continued
execution of our enhanced plan for returning capital to shareholders.
"Looking ahead, our teams have done a great job to both accelerate
hiring and operate efficiently, so we enter the second half poised to
maintain a strong full year profit outlook and produce solid bookings as
we set up for continued growth in late 2015 and beyond."
OUTLOOK FOR 2015
The Company updates its 2015 annual guidance to reflect the timing of
bookings, scale benefits, improved annual effective tax rate, and
currency movements as follows: Adjusted revenue of $935 to $950 million,
revenue of $933 to $948 million, capital expenditures of $30 to $32
million, Non-GAAP diluted earnings per share of $3.65 to $3.90, an
Adjusted EBITDA margin between 25.5% and 26.0%, and depreciation and
amortization expense of $68 to $70 million. Adjusted revenue refers to
revenue before the impact of the reduction of the revenue of SHL Talent
Measurement™ and KnowledgeAdvisors™ (referred to as "Metrics That
Matter™") recognized in the post-acquisition period to reflect the
adjustment of deferred revenue at the acquisition dates to fair value.
The estimated reduction in 2015 revenue to reflect the impact of the
deferred revenue fair value adjustment is approximately $2 million. This
guidance is based on the following foreign currency exchange rates: 1.55
USD to the British Pound, 1.11 USD to the Euro, and 0.78 USD to the
Australian Dollar.
In the first quarter of 2015, the Company adjusted its non-GAAP
financial measures to exclude the impact of the net non-operating
foreign currency gain (loss) included in other (expense) income. These
items primarily result from the remeasurement of foreign currency cash
balances held by CEB US and subsidiaries with the USD as their
functional currency, USD cash balances held by subsidiaries with a
functional currency other than the USD, certain intercompany notes, and
the balance sheets of non-US subsidiaries whose functional currency is
the USD.
SEGMENT HIGHLIGHTS
The CEB segment includes the historical CEB products and services
provided to senior executives and their teams to drive corporate
performance. In addition, the CEB segment includes the previously
disclosed acquisitions in February 2014 of Talent Neuron™, a provider of
market intelligence technology tools based on large-scale data
analytics, and Metrics That Matter, a provider of analytics solutions
for talent development professionals. The 2014 financial results only
include the results of operations of Talent Neuron and Metrics That
Matter from their respective dates of acquisition. The SHL Talent
Measurement segment includes the SHL products and services of
cloud-based solutions for talent assessment and talent mobility, as well
as professional services that support those solutions. PDRI, a
subsidiary acquired as part of the SHL acquisition, is included in the
CEB segment. PDRI provides customized personnel assessment and
performance management tools and services primarily to various agencies
of the US government and also to commercial enterprises.
CEB Segment
Revenue increased in the second quarter of 2015 to $181.8 million from
$175.4 million in the same period of 2014, an increase of 3.7%. Adjusted
revenue increased 2.7% (4.6% increase on a constant currency basis) in
the second quarter of 2015 to $181.8 million from $176.9 million in the
same period of 2014. Adjusted EBITDA in the second quarter of 2015 was
$49.8 million compared to $46.4 million in the same period of 2014, an
increase of 7.2% (7.9% increase on a constant currency basis). Adjusted
EBITDA margin in the second quarter of 2015 was 27.4% of segment
Adjusted revenue compared to 26.2% in the second quarter of 2014.
Revenue increased in the first six months of 2015 to $354.7 million from
$336.1 million in the same period of 2014, an increase of 5.5%. Adjusted
revenue increased 5.0% (6.7% increase on a constant currency basis) in
the first six months of 2015 to $354.7 million from $337.9 million in
the same period of 2014. Adjusted EBITDA in the first six months of 2015
was $94.1 million compared to $82.1 million in the same period of 2014,
an increase of 14.7% (15.3% increase on a constant currency basis).
Adjusted EBITDA margin in the first six months of 2015 was 26.5% of
segment Adjusted revenue compared to 24.3% in the first six months of
2014.
Contract Value at June 30, 2015 increased 4.1% (6.3% increase on a
constant currency basis) to $667.6 million compared to $641.1 million at
June 30, 2014. Wallet retention rate at June 30, 2015 was 94% (96% on a
constant currency basis) compared to 99% at June 30, 2014. Contract
Value per member institution was $95.5 thousand ($97.4 thousand on a
constant currency basis) at June 30, 2015 compared to $94.4 thousand at
June 30, 2014.
SHL Talent Measurement Segment
Revenue decreased in the second quarter of 2015 to $50.2 million from
$55.1 million in the same period of 2014, a decrease of 8.8%. Adjusted
revenue decreased 8.3% (1.4% increase on a constant currency basis) in
the second quarter of 2015 to $50.9 million from $55.5 million in the
same period of 2014. Adjusted EBITDA in the second quarter of 2015 was
$10.6 million compared to $9.7 million in the same period of 2014, an
increase of 8.8% (26.6% increase on a constant currency basis). Adjusted
EBITDA margin in the second quarter of 2015 was 20.8% of segment
Adjusted revenue compared to 17.5% in the second quarter of 2014.
Revenue decreased in the first six months of 2015 to $98.9 million from
$103.8 million in the same period of 2014, a decrease of 4.7%. Adjusted
revenue decreased 5.0% (4.5% increase on a constant currency basis) in
the first six months of 2015 to $100.0 million from $105.2 million in
the same period of 2014. Adjusted EBITDA in the first six months of 2015
was $19.4 million compared to $15.9 million in the same period of 2014,
an increase of 21.6% (41.4% increase on a constant currency basis).
Adjusted EBITDA margin in the first six months of 2015 was 19.4% of
segment Adjusted revenue compared to 15.1% in the first six months of
2014.
Wallet retention rate at June 30, 2015 was 102% compared to 104% at June
30, 2014. Unlike CEB members, a majority of SHL Talent Measurement
customers do not typically enter into contracts for fixed periods, so
Contract Value is not a relevant operating statistic for the segment.
QUARTERLY DIVIDEND
The Company announces that its Board of Directors has approved a cash
dividend on its common stock for the third quarter of 2015 of $0.375 per
share. The dividend is payable on September 30, 2015 to stockholders of
record on September 15, 2015. The Company will fund its dividend
payments with cash on hand and cash generated from operations.
SHARE REPURCHASE
In the second quarter of 2015, the Company repurchased approximately
74,000 shares of its common stock at a total cost of $6.3 million. These
purchases were made pursuant to the Company's $100 million stock
repurchase program approved by the Company's Board of Directors on
February 2, 2015, which is authorized through December 31, 2016.
NON-GAAP FINANCIAL MEASURES
This press release and the accompanying tables, as well as earnings
discussions, include a discussion of Adjusted revenue, Adjusted EBITDA,
Adjusted EBITDA margin, Adjusted net income, Non-GAAP diluted earnings
per share, and constant currency financial information, all of 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").
The term "Adjusted revenue" refers to revenue before the impact of the
reduction of SHL and Metrics That Matter revenue recognized in the
post-acquisition period to reflect the adjustment of deferred revenue at
the acquisition date to fair value (the "deferred revenue fair value
adjustment").
The term "Adjusted EBITDA" refers to net income (loss) before loss from
discontinued operations, net of provision for income taxes and excludes
the provision for income taxes; interest expense, net; net non-operating
foreign currency gain (loss); equity method investment loss;
depreciation and amortization; the impact of the deferred revenue fair
value adjustment; acquisition related costs; restructuring costs;
share-based compensation; gain on cost method investment; debt
extinguishment costs; impairment loss; costs associated with exit
activities; and gain on acquisition.
The term "Adjusted EBITDA margin" refers to Adjusted EBITDA as a
percentage of Adjusted revenue.
The term "Adjusted net income" refers to net income (loss) before loss
from discontinued operations, net of provision for income taxes and
excludes the after tax effects of the impact of net non-operating
foreign currency gain (loss); equity method investment loss;
amortization of acquisition related intangibles; the deferred revenue
fair value adjustment; acquisition related costs; restructuring costs;
share-based compensation; gain on cost method investment; debt
extinguishment costs; impairment loss; costs associated with exit
activities; and gain on acquisition.
"Non-GAAP diluted earnings per share" refers to diluted earnings (loss)
per share before the per share effect of loss from discontinued
operations, net of provision for income taxes and excludes the after tax
per share effects of net non-operating foreign currency gain (loss);
equity method investment loss; amortization of acquisition related
intangibles; the impact of the deferred revenue fair value adjustment;
acquisition related costs; restructuring costs; share-based
compensation; gain on cost method investment; debt extinguishment costs;
impairment loss; costs associated with exit activities; and gain on
acquisition.
We believe that these non-GAAP financial measures are relevant and
useful supplemental information for evaluating our results of operations
as compared from period to period and as compared to our competitors. We
use these non-GAAP financial measures for internal budgeting and other
managerial purposes, including comparison against our competitors, when
publicly providing our business outlook, and as a measurement for
potential acquisitions. These non-GAAP financial measures are not
defined in the same manner by all companies and therefore may not be
comparable to other similarly titled measures used by other companies.
Our non-GAAP financial measures reflect adjustments based on the
following items, as well as the related income tax effects:
-
Certain business combination accounting entries
and expenses related to acquisitions: We have adjusted for the
impact of the deferred revenue fair value adjustment, amortization of
acquisition related intangibles, and acquisition related costs. We
incurred transaction and certain other operating expenses in
connection with our acquisitions which we generally would not have
otherwise incurred in the periods presented as a part of our
continuing operations. We believe that excluding these acquisition
related items from our non-GAAP financial measures provides useful
supplemental information to our investors and is important in
illustrating what our core operating results would have been had we
not incurred these acquisition related items since the nature, size,
and number of acquisitions can vary from period to period.
-
Share-based compensation: Although
share-based compensation is a key incentive offered to our employees,
we evaluate our operating results excluding such expense. Accordingly,
we exclude share-based compensation from our non-GAAP financial
measures because we believe it provides valuable supplemental
information that helps investors have a more complete understanding of
our operating results. In addition, we believe the exclusion of this
expense facilitates the ability of our investors to compare our
operating results with those of other peer companies, many of which
also exclude such expense in determining their non-GAAP measures,
given varying valuation methodologies, subjective assumptions, and the
variety and amount of award types that may be utilized.
-
Net non-operating foreign currency gain (loss):
Beginning in the first quarter of 2015, we adjusted for the impact of
the net non-operating foreign currency gain (loss) included in other
(expense) income. These items primarily result from the remeasurement
of foreign currency cash balances held by CEB US and subsidiaries with
the USD as their functional currency, USD cash balances held by
subsidiaries with a functional currency other than the USD, certain
intercompany notes, and the balance sheets of non-US subsidiaries
whose functional currency is the USD. We believe this information is
useful to investors to facilitate comparison of operating results and
better identify trends in our businesses.
-
Equity method investment loss and restructuring
costs: We believe that excluding these items from our non-GAAP
financial measures provides useful supplemental information to our
investors and is important in illustrating what our core operating
results would have been had we not incurred these items. We exclude
these items because management does not believe they correlate to the
ongoing operating results of the business.
CEB is a global company that reports financial information in USD.
Foreign currency exchange rate fluctuations affect the amounts reported
from translating foreign revenues and expenses into USD. These rate
fluctuations can have a significant effect on our reported operating
results. As a supplement to our reported operating results, we present
constant currency financial information. We use constant currency
financial information to provide a framework to assess how our business
performed excluding the effects of changes in foreign currency
translation rates. Management believes this information is useful to
investors to facilitate comparison of operating results and better
identify trends in our businesses. To calculate financial information on
a constant currency basis, financial information in the current period
for amounts recorded in currencies other than the USD is translated into
USD at the average exchange rates in effect during the comparable period
of the prior year (rather than the actual exchange rates in effect
during the current year period).
These non-GAAP measures may be considered in addition to results
prepared in accordance with GAAP, but they should not be considered a
substitute for, or superior to, GAAP results. We intend to continue to
provide these non-GAAP financial measures as part of our future earnings
discussions and, therefore, the inclusion of these non-GAAP financial
measures will provide consistency in our financial reporting.
A reconciliation of these non-GAAP measures to the most directly
comparable GAAP measure is included in the accompanying tables.
With respect to our 2015 annual guidance, reconciliations of net income
to Adjusted EBITDA, net income to Adjusted net income, and GAAP diluted
earnings per share to Non-GAAP diluted earnings per share as projected
for 2015 are not provided because we cannot, without unreasonable
effort, determine the components of net income and GAAP diluted earnings
per share to provide reconciliations with certainty.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Statements using words such as "estimates," "expects," "anticipates,"
"projects," "plans," "intends," "believes," "forecasts," and variations
of such words or similar expressions are intended to identify
forward-looking statements. In addition, all statements other than
statements of historical fact are statements that could be deemed
forward-looking statements, including but not limited to our 2015 annual
guidance. You are hereby cautioned that these statements are based upon
our expectations at the time we make them and may be affected by
important factors including, among others, the factors set forth below
and in our filings with the US Securities and Exchange Commission
("SEC"), and consequently, actual operations and results may differ
materially from the results discussed in the forward-looking statements.
Our expectations, beliefs and projections are expressed in good faith
and we believe there is a reasonable basis for them. 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, the sale of additional
programs to existing members and our ability to attract new members, our
potential failure to adapt to changing member needs and demands, our
potential failure to develop and sell, or expand sales markets for our
SHL Talent Measurement tools and services, our potential inability to
attract and retain a significant number of highly skilled employees or
successfully manage succession planning issues, fluctuations in
operating results, our potential inability to protect our intellectual
property rights, our potential inability to adequately maintain and
protect our information technology infrastructure and our member and
client data, potential confusion about our rebranding, including our
integration of the SHL Talent Measurement brand, our potential exposure
to loss of revenue resulting from our unconditional service guarantee,
exposure to litigation related to our content, various factors that
could affect our estimated income tax rate or our ability to use our
existing deferred tax assets, changes in estimates, assumptions or
revenue recognition policies used to prepare our consolidated financial
statements, including those related to testing for potential goodwill
impairment, our potential inability to make, integrate and maintain
acquisitions and investments, the amount and timing of the benefits
expected from acquisitions and investments, the risk that we will be
required to recognize additional impairments to the carrying value of
the significant goodwill and amortizable intangible asset amounts
included in our balance sheet as a result of our acquisitions, which
would require us to record charges that would reduce our reported
results, our potential inability to effectively manage the risks
associated with the indebtedness we incurred and the senior secured
credit facilities we entered into in connection with our acquisition of
SHL or any additional indebtedness we may incur in the future, our
potential inability to effectively manage the risks associated with our
international operations, including the risk of foreign currency
exchange fluctuations, our potential inability to effectively
anticipate, plan for and respond to changing economic and financial
market conditions, especially in light of ongoing uncertainty in the
worldwide economy, the US economy, and possible volatility of our stock
price. Various important factors that could cause our actual results to
differ from our expected or historical results are discussed more fully
in the "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Risk Factors" sections of our filings with
the SEC, including, but not limited to, our 2014 Annual Report on Form
10-K filed on February 27, 2015. The forward-looking statements in this
press release are made as of July 28, 2015, and we undertake no
obligation to update any forward-looking statements, whether as a result
of new information, future events, or otherwise.
ABOUT CEB
CEB is a best practice insight and technology company. In partnership
with leading organizations around the globe, we develop innovative
solutions to drive corporate performance. CEB equips leaders at more
than 10,000 companies with the intelligence to effectively manage
talent, customers, and operations. CEB is a trusted partner to 90% of
the Fortune 500, nearly 75% of the Dow Jones Asian Titans, and more than
85% of the FTSE 100. More at cebglobal.com.
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CEB Inc. Financial Highlights and Other Operating
Statistics
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Selected
Percentage
Changes
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Three Months Ended
June 30,
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Selected
Percentage
Changes
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Six Months Ended
June 30,
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2015
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2014
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2015
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2014
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Financial Highlights:
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(In thousands, except per share data)
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Revenue
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0.7
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%
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$
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231,964
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$
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230,427
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3.1
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%
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$
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453,563
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$
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439,864
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Adjusted revenue (1)
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0.1
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%
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$
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232,653
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$
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232,377
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2.6
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%
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$
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454,671
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$
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443,098
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Net income (loss)
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$
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23,212
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$
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(6,421
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)
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$
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42,302
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$
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1,235
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Adjusted net income (1)
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45.8
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%
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$
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39,983
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$
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27,423
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38.7
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%
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$
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64,533
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$
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46,541
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Adjusted EBITDA (1)
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7.5
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%
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$
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60,358
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$
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56,158
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15.8
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%
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$
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113,495
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$
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97,982
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Adjusted EBITDA margin (1)
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25.9
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%
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24.2
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%
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25.0
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%
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22.1
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%
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Diluted earnings (loss) per share
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$
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0.69
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$
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(0.19
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$
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1.25
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$
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0.04
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Non-GAAP diluted earnings per share (1)
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46.9
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%
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$
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1.19
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$
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0.81
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40.4
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%
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$
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1.91
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$
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1.36
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Other Operating Statistics:
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CEB segment Contract Value (in thousands) (2)
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4.1
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%
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$
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667,649
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$
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641,091
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Constant currency CEB segment Contract Value (in thousands) (3)
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6.3
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%
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$
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681,231
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CEB segment Member institutions (4)
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3.0
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%
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6,983
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6,780
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CEB segment Contract Value per member institution (4)
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1.2
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%
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$
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95,483
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$
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94,366
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Constant currency CEB segment Contract Value per member institution (3)
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3.2
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%
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$
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97,400
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CEB segment Wallet retention rate (5)
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94
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%
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99
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%
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Constant currency CEB segment Wallet retention rate (3)
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96
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%
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SHL Talent Measurement segment Wallet retention rate (6)
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102
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%
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104
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%
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(1) See "Non-GAAP Financial Measures" for further
explanation.
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(2) We define "CEB segment Contract Value," at the end
of the quarter, as the aggregate annualized revenue attributed to
all agreements in effect on such date, without regard to the
remaining duration of any such agreement. CEB segment Contract
Value does not include the impact of PDRI.
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(3) Calculated on a constant currency basis whereby
financial information in the current period for amounts recorded
in currencies other than the USD is translated into USD at the
average exchange rates in effect during the comparable period of
the prior year (rather than the actual exchange rates in effect
during the current year period).
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(4) We define "CEB segment Member institutions," at the
end of the quarter, as member institutions with Contract Value in
excess of $10,000. The same definition is applied to "CEB segment
Contract Value per member institution."
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(5) We define "CEB segment Wallet retention rate," at
the end of the quarter, as the total current year segment Contract
Value from prior year members as a percentage of the total prior
year segment Contract Value. The CEB segment Wallet retention rate
does not include the impact of PDRI.
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(6) We define "SHL Talent Measurement segment Wallet
retention rate," at the end of the quarter on a constant currency
basis, as the last current 12 months of total segment Adjusted
revenue from prior year customers as a percentage of the prior 12
months of total segment Adjusted revenue.
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|
|
|
|
|
|
CEB Inc. Unaudited Consolidated Statements of
Operations (In thousands, except per share data)
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenue (1)
|
|
|
$
|
231,964
|
|
|
$
|
230,427
|
|
|
|
$
|
453,563
|
|
|
$
|
439,864
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of services (2)
|
|
|
|
82,432
|
|
|
|
84,080
|
|
|
|
|
161,091
|
|
|
|
161,318
|
|
Member relations and marketing (2)
|
|
|
|
65,509
|
|
|
|
67,034
|
|
|
|
|
131,594
|
|
|
|
133,797
|
|
General and administrative (2)
|
|
|
|
28,293
|
|
|
|
29,300
|
|
|
|
|
57,098
|
|
|
|
58,425
|
|
Acquisition related costs (3)
|
|
|
|
-
|
|
|
|
1,106
|
|
|
|
|
-
|
|
|
|
2,445
|
|
Restructuring costs
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
1,238
|
|
|
|
-
|
|
Impairment loss
|
|
|
|
-
|
|
|
|
39,700
|
|
|
|
|
-
|
|
|
|
39,700
|
|
Depreciation and amortization
|
|
|
|
16,892
|
|
|
|
18,437
|
|
|
|
|
33,734
|
|
|
|
34,931
|
|
Total costs and expenses
|
|
|
|
193,126
|
|
|
|
239,657
|
|
|
|
|
384,755
|
|
|
|
430,616
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit (loss)
|
|
|
|
38,838
|
|
|
|
(9,230
|
)
|
|
|
|
68,808
|
|
|
|
9,248
|
|
Other (expense) income, net
|
|
|
|
|
|
|
|
|
|
|
Debt extinguishment costs
|
|
|
|
(4,775
|
)
|
|
|
-
|
|
|
|
|
(4,775
|
)
|
|
|
-
|
|
Interest income and other (4)
|
|
|
|
(5,360
|
)
|
|
|
(1,435
|
)
|
|
|
|
366
|
|
|
|
(2,088
|
)
|
Gain on cost method investment
|
|
|
|
-
|
|
|
|
6,585
|
|
|
|
|
-
|
|
|
|
6,585
|
|
Interest expense
|
|
|
|
(4,787
|
)
|
|
|
(4,528
|
)
|
|
|
|
(9,226
|
)
|
|
|
(9,311
|
)
|
Other (expense) income, net
|
|
|
|
(14,922
|
)
|
|
|
622
|
|
|
|
|
(13,635
|
)
|
|
|
(4,814
|
)
|
Income (loss) before provision for income taxes
|
|
|
|
23,916
|
|
|
|
(8,608
|
)
|
|
|
|
55,173
|
|
|
|
4,434
|
|
Provision for income taxes
|
|
|
|
704
|
|
|
|
(2,187
|
)
|
|
|
|
12,871
|
|
|
|
3,199
|
|
Net income (loss)
|
|
|
$
|
23,212
|
|
|
$
|
(6,421
|
)
|
|
|
$
|
42,302
|
|
|
$
|
1,235
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
|
$
|
0.69
|
|
|
$
|
(0.19
|
)
|
|
|
$
|
1.26
|
|
|
$
|
0.04
|
|
Diluted earnings (loss) per share
|
|
|
$
|
0.69
|
|
|
$
|
(0.19
|
)
|
|
|
$
|
1.25
|
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
33,458
|
|
|
|
33,703
|
|
|
|
|
33,516
|
|
|
|
33,709
|
|
Diluted
|
|
|
|
33,694
|
|
|
|
34,003
|
|
|
|
|
33,827
|
|
|
|
34,101
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of Adjusted Revenue
|
|
|
|
|
|
|
|
|
|
|
Cost of services
|
|
|
|
35.4
|
%
|
|
|
36.2
|
%
|
|
|
|
35.4
|
%
|
|
|
36.4
|
%
|
Member relations and marketing
|
|
|
|
28.2
|
%
|
|
|
28.8
|
%
|
|
|
|
28.9
|
%
|
|
|
30.2
|
%
|
General and administrative
|
|
|
|
12.2
|
%
|
|
|
12.6
|
%
|
|
|
|
12.6
|
%
|
|
|
13.2
|
%
|
Depreciation and amortization
|
|
|
|
7.3
|
%
|
|
|
7.9
|
%
|
|
|
|
7.4
|
%
|
|
|
7.9
|
%
|
Operating profit (loss)
|
|
|
|
16.7
|
%
|
|
|
(4.0
|
)%
|
|
|
|
15.1
|
%
|
|
|
2.1
|
%
|
Adjusted EBITDA (5)
|
|
|
|
25.9
|
%
|
|
|
24.2
|
%
|
|
|
|
25.0
|
%
|
|
|
22.1
|
%
|
|
(1) Net of a reduction to reflect the impact of the
deferred revenue fair value adjustment of $0.7 million and $2.0
million in the three months ended June 30, 2015 and 2014 and $1.1
million and $3.2 million in the six months ended June 30, 2015 and
2014, respectively.
|
(2) The Company adjusted its allocation of certain
costs in the three and six months ended June 30, 2014 to conform
to the current period presentation. The reclassification did not
have an impact on total costs and expenses or operating profit.
|
(3) Acquisition related costs in the three and six
months ended June 30, 2014 primarily relate to transaction and
integration costs associated with the acquisitions of Metrics That
Matter and Talent Neuron.
|
(4) Interest income and other in the three months ended
June 30, 2015 includes $0.1 million of interest income offset by a
$4.7 million net foreign currency loss, a $0.2 million decrease in
the fair value of deferred compensation plan, $0.1 million of
equity method investment losses and $0.5 million of other losses.
Interest income and other in the three months ended June 30, 2014
includes a $0.6 million increase in the fair value of deferred
compensation plan assets and $0.2 million of interest income
offset by a $2.0 million net foreign currency loss and $0.2
million of other loss. Interest income and other in the six months
ended June 30, 2015 includes a $1.5 million net foreign currency
gain, $0.2 million of interest income, and a $0.2 million increase
in the fair value of deferred compensation plan assets offset by
$0.9 million of equity method investment losses and $0.6 million
of other losses. Interest income and other in the six months ended
June 30, 2014 includes a $0.8 million increase in the fair value
of deferred compensation plan assets and $0.2 million of interest
income offset by a $2.9 million net foreign currency loss and $0.2
million of other loss.
|
(5) See "Non-GAAP Financial Measures" for further
explanation.
|
|
|
|
|
|
|
|
|
|
|
|
|
CEB Inc. Segment Operating Results (In
thousands)
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
Adjusted Revenue (1)
|
|
|
|
|
|
|
|
|
|
|
CEB segment
|
|
|
$
|
181,773
|
|
|
$
|
176,917
|
|
|
|
$
|
354,721
|
|
|
$
|
337,936
|
|
SHL Talent Measurement segment
|
|
|
|
50,880
|
|
|
|
55,460
|
|
|
|
|
99,950
|
|
|
|
105,162
|
|
|
|
|
$
|
232,653
|
|
|
$
|
232,377
|
|
|
|
$
|
454,671
|
|
|
$
|
443,098
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA (1)(2)
|
|
|
|
|
|
|
|
|
|
|
CEB segment
|
|
|
$
|
49,782
|
|
|
$
|
46,437
|
|
|
|
$
|
94,145
|
|
|
$
|
82,065
|
|
SHL Talent Measurement segment
|
|
|
|
10,576
|
|
|
|
9,721
|
|
|
|
|
19,350
|
|
|
|
15,917
|
|
|
|
|
$
|
60,358
|
|
|
$
|
56,158
|
|
|
|
$
|
113,495
|
|
|
$
|
97,982
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA Margin (1)(2)
|
|
|
|
|
|
|
|
|
|
|
CEB segment
|
|
|
|
27.4
|
%
|
|
|
26.2
|
%
|
|
|
|
26.5
|
%
|
|
|
24.3
|
%
|
SHL Talent Measurement segment
|
|
|
|
20.8
|
%
|
|
|
17.5
|
%
|
|
|
|
19.4
|
%
|
|
|
15.1
|
%
|
Consolidated
|
|
|
|
25.9
|
%
|
|
|
24.2
|
%
|
|
|
|
25.0
|
%
|
|
|
22.1
|
%
|
|
(1) See "Non-GAAP Financial Measures" for further
explanation.
|
(2) The net non-operating foreign currency (loss) gain
included in Interest income and other was $(4.7) million and
$(2.0) million in the three months ended June 30, 2015 and 2014,
respectively and $1.5 million and $(2.9) million in the six months
ended June 30, 2015 and 2014, respectively.
|
|
|
|
|
|
|
CEB Inc. Condensed Consolidated Balance Sheets (In
thousands)
|
|
|
|
|
June 30,
2015
|
|
December 31,
2014
|
|
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
124,143
|
|
$
|
114,934
|
Accounts receivable, net (1)
|
|
|
|
195,515
|
|
|
283,069
|
Deferred income taxes, net
|
|
|
|
15,828
|
|
|
19,834
|
Deferred incentive compensation
|
|
|
|
26,684
|
|
|
25,779
|
Prepaid expenses and other current assets (3)
|
|
|
|
48,369
|
|
|
19,099
|
Total current assets
|
|
|
|
410,539
|
|
|
462,715
|
|
|
|
|
|
|
Deferred income taxes, net
|
|
|
|
1,688
|
|
|
909
|
Property and equipment, net
|
|
|
|
109,565
|
|
|
112,524
|
Goodwill
|
|
|
|
447,174
|
|
|
441,207
|
Intangible assets, net
|
|
|
|
247,127
|
|
|
260,383
|
Other non-current assets (3)
|
|
|
|
84,091
|
|
|
74,728
|
Total assets
|
|
|
$
|
1,300,184
|
|
$
|
1,352,466
|
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
$
|
67,975
|
|
$
|
89,696
|
Accrued incentive compensation
|
|
|
|
40,368
|
|
|
65,731
|
Deferred revenue (2)
|
|
|
|
441,569
|
|
|
452,679
|
Deferred income taxes, net
|
|
|
|
297
|
|
|
190
|
Debt - current portion (3)
|
|
|
|
4,941
|
|
|
15,544
|
Total current liabilities
|
|
|
|
555,150
|
|
|
623,840
|
|
|
|
|
|
|
Deferred income taxes
|
|
|
|
33,453
|
|
|
34,563
|
Other liabilities
|
|
|
|
123,350
|
|
|
122,832
|
Debt - long term (3)
|
|
|
|
488,362
|
|
|
485,094
|
Total liabilities
|
|
|
|
1,200,315
|
|
|
1,266,329
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
|
99,869
|
|
|
86,137
|
Total liabilities and stockholders' equity
|
|
|
$
|
1,300,184
|
|
$
|
1,352,466
|
|
(1) Includes accounts receivable, net of $63.1 million
and $61.7 million at June 30, 2015 and December 31, 2014,
respectively, related to the SHL Talent Measurement segment.
|
(2) Includes deferred revenue of $73.0 million and
$67.4 million at June 30, 2015 and December 31, 2014,
respectively, related to the SHL Talent Measurement segment.
|
(3) In the second quarter of 2015, the Company early
adopted ASU 2015-03, Simplifying the Presentation of Debt
Issuance Costs. The December 31, 2014 balance sheet was
retrospectively adjusted resulting in a reclassification of $2.1
million from Prepaid expenses and other current assets and $2.8
million from Other non-current assets to the debt liability.
|
|
|
|
|
|
|
CEB Inc. Consolidated Statements of Cash Flows (In
thousands)
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
(Unaudited)
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
42,302
|
|
|
|
|
$
|
1,235
|
|
Adjustments to reconcile net income to net cash flows provided by
operating activities:
|
|
|
|
|
|
|
|
|
Debt extinguishment costs
|
|
|
|
|
4,775
|
|
|
|
|
|
-
|
|
Impairment loss
|
|
|
|
|
-
|
|
|
|
|
|
39,700
|
|
Gain on cost method investment
|
|
|
|
|
-
|
|
|
|
|
|
(6,585
|
)
|
Equity method investment loss
|
|
|
|
|
898
|
|
|
|
|
|
-
|
|
Depreciation and amortization
|
|
|
|
|
33,734
|
|
|
|
|
|
34,931
|
|
Amortization of credit facility issuance costs
|
|
|
|
|
1,242
|
|
|
|
|
|
1,294
|
|
Deferred income taxes
|
|
|
|
|
797
|
|
|
|
|
|
(13,851
|
)
|
Share-based compensation
|
|
|
|
|
9,003
|
|
|
|
|
|
7,757
|
|
Excess tax benefits from share-based compensation arrangements
|
|
|
|
|
(3,989
|
)
|
|
|
|
|
(3,053
|
)
|
Net foreign currency remeasurement (gain) loss
|
|
|
|
|
(857
|
)
|
|
|
|
|
1,755
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
|
|
86,697
|
|
|
|
|
|
68,630
|
|
Deferred incentive compensation
|
|
|
|
|
(951
|
)
|
|
|
|
|
(901
|
)
|
Prepaid expenses and other current assets
|
|
|
|
|
(27,119
|
)
|
|
|
|
|
(2,715
|
)
|
Other non-current assets
|
|
|
|
|
(9,404
|
)
|
|
|
|
|
(902
|
)
|
Accounts payable and accrued liabilities
|
|
|
|
|
(18,032
|
)
|
|
|
|
|
(22,528
|
)
|
Accrued incentive compensation
|
|
|
|
|
(25,098
|
)
|
|
|
|
|
(21,560
|
)
|
Deferred revenue
|
|
|
|
|
(8,948
|
)
|
|
|
|
|
3,626
|
|
Other liabilities
|
|
|
|
|
208
|
|
|
|
|
|
3,325
|
|
Net cash flows provided by operating activities
|
|
|
|
|
85,258
|
|
|
|
|
|
90,158
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
|
|
(13,401
|
)
|
|
|
|
|
(23,819
|
)
|
Cost method and other investments
|
|
|
|
|
(2,589
|
)
|
|
|
|
|
(1,092
|
)
|
Acquisition of businesses, net of cash acquired
|
|
|
|
|
(5,808
|
)
|
|
|
|
|
(58,902
|
)
|
Net cash flows used in investing activities
|
|
|
|
|
(21,798
|
)
|
|
|
|
|
(83,813
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from issuance of senior notes
|
|
|
|
|
250,000
|
|
|
|
|
|
-
|
|
Debt payments
|
|
|
|
|
(257,250
|
)
|
|
|
|
|
(5,376
|
)
|
Debt issuance costs
|
|
|
|
|
(5,275
|
)
|
|
|
|
|
-
|
|
Proceeds from the issuance of common stock under the employee stock
purchase plan
|
|
|
|
|
757
|
|
|
|
|
|
557
|
|
Excess tax benefits from share-based compensation arrangements
|
|
|
|
|
3,989
|
|
|
|
|
|
3,053
|
|
Purchase of treasury shares
|
|
|
|
|
(12,623
|
)
|
|
|
|
|
(5,241
|
)
|
Withholding of shares to satisfy minimum employee tax withholding
for equity awards
|
|
|
|
|
(8,302
|
)
|
|
|
|
|
(6,673
|
)
|
Payment of dividends
|
|
|
|
|
(25,115
|
)
|
|
|
|
|
(17,691
|
)
|
Net cash flows used in financing activities
|
|
|
|
|
(53,819
|
)
|
|
|
|
|
(31,371
|
)
|
|
|
|
|
|
|
|
|
|
Effect of exchange rates on cash
|
|
|
|
|
(432
|
)
|
|
|
|
|
713
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
|
9,209
|
|
|
|
|
|
(24,313
|
)
|
Cash and cash equivalents, beginning of year
|
|
|
|
|
114,934
|
|
|
|
|
|
119,554
|
|
Cash and cash equivalents, end of period
|
|
|
|
$
|
124,143
|
|
|
|
|
$
|
95,241
|
|
|
|
|
|
|
|
CEB Inc. Reconciliation of Non-GAAP Financial
Measures (In thousands, except per share data)
|
|
A reconciliation of each of the non-GAAP measures to the most
directly comparable GAAP measure is provided below.
|
|
Adjusted Revenue
|
|
|
|
|
Three Months Ended June 30, 2015
|
|
|
Three Months Ended June 30, 2014
|
|
|
|
CEB
|
|
|
SHL
|
|
|
Total
|
|
|
CEB
|
|
|
SHL
|
|
|
Total
|
Revenue
|
|
|
$
|
181,773
|
|
|
|
$
|
50,191
|
|
|
|
$
|
231,964
|
|
|
|
$
|
175,370
|
|
|
|
$
|
55,057
|
|
|
|
$
|
230,427
|
|
Impact of the deferred revenue fair value adjustment
|
|
|
|
-
|
|
|
|
|
689
|
|
|
|
|
689
|
|
|
|
|
1,547
|
|
|
|
|
403
|
|
|
|
|
1,950
|
|
Adjusted revenue
|
|
|
$
|
181,773
|
|
|
|
$
|
50,880
|
|
|
|
$
|
232,653
|
|
|
|
$
|
176,917
|
|
|
|
$
|
55,460
|
|
|
|
$
|
232,377
|
|
|
|
|
|
|
Six Months Ended June 30, 2015
|
|
|
Six Months Ended June 30, 2014
|
|
|
|
CEB
|
|
|
SHL
|
|
|
Total
|
|
|
CEB
|
|
|
SHL
|
|
|
Total
|
Revenue
|
|
|
$
|
354,667
|
|
|
|
$
|
98,896
|
|
|
|
$
|
453,563
|
|
|
|
$
|
336,089
|
|
|
|
$
|
103,775
|
|
|
|
$
|
439,864
|
|
Impact of the deferred revenue fair value adjustment
|
|
|
|
54
|
|
|
|
|
1,054
|
|
|
|
|
1,108
|
|
|
|
|
1,847
|
|
|
|
|
1,387
|
|
|
|
|
3,234
|
|
Adjusted revenue
|
|
|
$
|
354,721
|
|
|
|
$
|
99,950
|
|
|
|
$
|
454,671
|
|
|
|
$
|
337,936
|
|
|
|
$
|
105,162
|
|
|
|
$
|
443,098
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
Three Months Ended June 30, 2015
|
|
|
Three Months Ended June 30, 2014
|
|
|
|
CEB
|
|
|
SHL
|
|
|
Total
|
|
|
CEB
|
|
|
SHL
|
|
|
Total
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
$
|
23,212
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(6,421
|
)
|
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
704
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,187
|
)
|
Interest expense, net
|
|
|
|
|
|
|
|
|
|
|
|
4,693
|
|
|
|
|
|
|
|
|
|
|
|
|
4,347
|
|
Debt extinguishment costs
|
|
|
|
|
|
|
|
|
|
|
|
4,775
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
Gain on cost method investment
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,585
|
)
|
Other expense, net
|
|
|
|
|
|
|
|
|
|
|
|
5,454
|
|
|
|
|
|
|
|
|
|
|
|
|
1,616
|
|
Operating profit (loss)
|
|
|
$
|
37,453
|
|
|
|
$
|
1,385
|
|
|
|
|
38,838
|
|
|
|
$
|
(9,158
|
)
|
|
|
$
|
(72
|
)
|
|
|
|
(9,230
|
)
|
Other expense, net
|
|
|
|
(3,285
|
)
|
|
|
|
(2,169
|
)
|
|
|
|
(5,454
|
)
|
|
|
|
(1,008
|
)
|
|
|
|
(608
|
)
|
|
|
|
(1,616
|
)
|
Net non-operating foreign currency loss
|
|
|
|
2,675
|
|
|
|
|
2,057
|
|
|
|
|
4,732
|
|
|
|
|
1,693
|
|
|
|
|
341
|
|
|
|
|
2,034
|
|
Equity method investment loss
|
|
|
|
6
|
|
|
|
|
55
|
|
|
|
|
61
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Depreciation and amortization
|
|
|
|
8,811
|
|
|
|
|
8,081
|
|
|
|
|
16,892
|
|
|
|
|
9,343
|
|
|
|
|
9,094
|
|
|
|
|
18,437
|
|
Impact of the deferred revenue fair value adjustment
|
|
|
|
-
|
|
|
|
|
689
|
|
|
|
|
689
|
|
|
|
|
1,547
|
|
|
|
|
403
|
|
|
|
|
1,950
|
|
Acquisition related costs
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1,106
|
|
|
|
|
-
|
|
|
|
|
1,106
|
|
Restructuring costs
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Impairment loss
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
39,700
|
|
|
|
|
-
|
|
|
|
|
39,700
|
|
Share-based compensation
|
|
|
|
4,122
|
|
|
|
|
478
|
|
|
|
|
4,600
|
|
|
|
|
3,214
|
|
|
|
|
563
|
|
|
|
|
3,777
|
|
Adjusted EBITDA
|
|
|
$
|
49,782
|
|
|
|
$
|
10,576
|
|
|
|
$
|
60,358
|
|
|
|
$
|
46,437
|
|
|
|
$
|
9,721
|
|
|
|
$
|
56,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin
|
|
|
|
27.4
|
%
|
|
|
|
20.8
|
%
|
|
|
|
25.9
|
%
|
|
|
|
26.2
|
%
|
|
|
|
17.5
|
%
|
|
|
|
24.2
|
%
|
|
|
|
|
|
|
CEB Inc. Reconciliation of Non-GAAP Financial
Measures (Continued) (In thousands, except per share
data)
|
|
Adjusted EBITDA (Continued)
|
|
|
|
|
Six Months Ended June 30, 2015
|
|
|
Six Months Ended June 30, 2014
|
|
|
|
CEB
|
|
|
SHL
|
|
|
Total
|
|
|
CEB
|
|
|
SHL
|
|
|
Total
|
Net income
|
|
|
|
|
|
|
|
|
$
|
42,302
|
|
|
|
|
|
|
|
|
|
$1,235
|
|
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
12,871
|
|
|
|
|
|
|
|
|
|
3,199
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
|
9,037
|
|
|
|
|
|
|
|
|
|
9,155
|
|
Debt extinguishment costs
|
|
|
|
|
|
|
|
|
|
4,775
|
|
|
|
|
|
|
|
|
|
-
|
|
Gain on cost method investment
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
(6,585
|
)
|
Other (income) expense, net
|
|
|
|
|
|
|
|
|
|
(177
|
)
|
|
|
|
|
|
|
|
|
2,244
|
|
Operating profit (loss)
|
|
|
$
|
68,388
|
|
|
|
$
|
420
|
|
|
|
|
68,808
|
|
|
|
$
|
13,216
|
|
|
|
$(3,968
|
)
|
|
|
9,248
|
|
Other income (expense), net
|
|
|
|
123
|
|
|
|
|
54
|
|
|
|
|
177
|
|
|
|
|
(1,089
|
)
|
|
|
(1,155
|
)
|
|
|
(2,244
|
)
|
Net non-operating foreign currency (gain) loss
|
|
|
|
(1,135
|
)
|
|
|
|
(336
|
)
|
|
|
|
(1,471
|
)
|
|
|
|
2,080
|
|
|
|
831
|
|
|
|
2,911
|
|
Equity method investment loss
|
|
|
|
649
|
|
|
|
|
249
|
|
|
|
|
898
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Depreciation and amortization
|
|
|
|
17,633
|
|
|
|
|
16,101
|
|
|
|
|
33,734
|
|
|
|
|
17,135
|
|
|
|
17,796
|
|
|
|
34,931
|
|
Impact of the deferred revenue fair value adjustment
|
|
|
|
54
|
|
|
|
|
1,054
|
|
|
|
|
1,108
|
|
|
|
|
1,847
|
|
|
|
1,387
|
|
|
|
3,234
|
|
Acquisition related costs
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
2,445
|
|
|
|
-
|
|
|
|
2,445
|
|
Restructuring costs
|
|
|
|
290
|
|
|
|
|
948
|
|
|
|
|
1,238
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Impairment loss
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
39,700
|
|
|
|
-
|
|
|
|
39,700
|
|
Share-based compensation
|
|
|
|
8,143
|
|
|
|
|
860
|
|
|
|
|
9,003
|
|
|
|
|
6,731
|
|
|
|
1,026
|
|
|
|
7,757
|
|
Adjusted EBITDA
|
|
|
$
|
94,145
|
|
|
|
$
|
19,350
|
|
|
|
$
|
113,495
|
|
|
|
$
|
82,065
|
|
|
|
$15,917
|
|
|
|
$97,982
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin
|
|
|
|
26.5
|
%
|
|
|
|
19.4
|
%
|
|
|
|
25.0
|
%
|
|
|
|
24.3
|
%
|
|
|
15.1
|
%
|
|
|
22.1
|
%
|
|
|
Adjusted Net Income
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
2015
|
|
|
|
2014
|
Net income (loss)
|
|
|
|
|
$
|
23,212
|
|
|
|
$
|
(6,421
|
)
|
|
|
|
|
$
|
42,302
|
|
|
|
|
$
|
1,235
|
|
Net non-operating foreign currency loss (gain) (1)
|
|
|
|
|
|
4,182
|
|
|
|
|
1,895
|
|
|
|
|
|
|
(1,206
|
)
|
|
|
|
|
2,689
|
|
Debt extinguishment costs (1)
|
|
|
|
|
|
2,841
|
|
|
|
|
-
|
|
|
|
|
|
|
2,841
|
|
|
|
|
|
-
|
|
Equity method investment loss (1)
|
|
|
|
|
|
59
|
|
|
|
|
-
|
|
|
|
|
|
|
636
|
|
|
|
|
|
-
|
|
Amortization of acquisition related intangibles (1)
|
|
|
|
|
|
6,307
|
|
|
|
|
7,429
|
|
|
|
|
|
|
12,675
|
|
|
|
|
|
13,929
|
|
Impact of the deferred revenue fair value adjustment (1)
|
|
|
|
|
|
517
|
|
|
|
|
1,219
|
|
|
|
|
|
|
827
|
|
|
|
|
|
2,127
|
|
Acquisition related costs (1)
|
|
|
|
|
|
-
|
|
|
|
|
743
|
|
|
|
|
|
|
-
|
|
|
|
|
|
1,545
|
|
Restructuring costs (1)
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
860
|
|
|
|
|
|
-
|
|
Impairment loss (2)
|
|
|
|
|
|
-
|
|
|
|
|
24,139
|
|
|
|
|
|
|
-
|
|
|
|
|
|
24,139
|
|
Gain on cost method investment (1)
|
|
|
|
|
|
-
|
|
|
|
|
(3,944
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
(3,944
|
)
|
Share-based compensation (1)
|
|
|
|
|
|
2,865
|
|
|
|
|
2,363
|
|
|
|
|
|
|
5,598
|
|
|
|
|
|
4,821
|
|
Adjusted net income
|
|
|
|
|
$
|
39,983
|
|
|
|
$
|
27,423
|
|
|
|
|
|
$
|
64,533
|
|
|
|
|
$
|
46,541
|
|
|
|
|
|
|
|
CEB Inc. Reconciliation of Non-GAAP Financial
Measures (Continued) (In thousands, except per share
data)
|
|
Non-GAAP Diluted Earnings per Share
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
Diluted earnings (loss) per share
|
|
|
|
$
|
0.69
|
|
|
$
|
(0.19
|
)
|
|
|
$
|
1.25
|
|
|
|
$
|
0.04
|
|
Net non-operating foreign currency loss (gain) (1)
|
|
|
|
|
0.12
|
|
|
|
0.06
|
|
|
|
|
(0.04
|
)
|
|
|
|
0.07
|
|
Debt extinguishment costs (1)
|
|
|
|
|
0.08
|
|
|
|
-
|
|
|
|
|
0.08
|
|
|
|
|
-
|
|
Equity method investment loss (1)
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
0.02
|
|
|
|
|
-
|
|
Amortization of acquisition related intangibles (1)
|
|
|
|
|
0.19
|
|
|
|
0.22
|
|
|
|
|
0.37
|
|
|
|
|
0.41
|
|
Impact of the deferred revenue fair value adjustment (1)
|
|
|
|
|
0.02
|
|
|
|
0.04
|
|
|
|
|
0.03
|
|
|
|
|
0.06
|
|
Acquisition related costs (1)
|
|
|
|
|
-
|
|
|
|
0.02
|
|
|
|
|
-
|
|
|
|
|
0.05
|
|
Restructuring costs (1)
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
0.03
|
|
|
|
|
-
|
|
Impairment loss (2)
|
|
|
|
|
-
|
|
|
|
0.71
|
|
|
|
|
-
|
|
|
|
|
0.71
|
|
Gain on cost method investment (1)
|
|
|
|
|
-
|
|
|
|
(0.12
|
)
|
|
|
|
-
|
|
|
|
|
(0.12
|
)
|
Share-based compensation (1)
|
|
|
|
|
0.09
|
|
|
|
0.07
|
|
|
|
|
0.17
|
|
|
|
|
0.14
|
|
Non-GAAP diluted earnings per share
|
|
|
|
$
|
1.19
|
|
|
$
|
0.81
|
|
|
|
$
|
1.91
|
|
|
|
$
|
1.36
|
|
|
(1) Adjustments are net of the annual estimated income
tax effect using statutory rates based on the relative amounts
allocated to each jurisdiction in the applicable period. The
following income tax rates were used: 18% in 2015 and 10% in 2014
for the net non-operating foreign currency loss (gain); 40% in
2015 for the debt extinguishment costs; 29% in 2015 for the equity
method investment loss; 29% in 2015 and 30% in 2014 for the
amortization of acquisition related intangibles; 26% in 2015 and
29% in 2014 for the impact of the deferred revenue fair value
adjustment; 40% in 2014 for acquisition related costs; 31% in 2015
for restructuring costs; 40% in 2014 for the gain on cost method
investment; and 38% in 2015 and 2014 for share-based compensation.
|
|
(2) The $39.7 million impairment loss associated with
PDRI's non-deductible intangible assets and goodwill recognized in
the three months ended June 30, 2014 was not treated as a discrete
event in the provision for income taxes; rather, it was considered
to be a component of the estimated annual effective tax rate.
Approximately $0.4 million of the income tax effect associated
with the non-deductible goodwill impairment loss was reflected in
the income tax provision in the three and six months ended June
30, 2014 and the remaining tax effect was added back in the third
and fourth quarter of 2014 to bring the full year adjustment to
$31.4 million.
|
|
|
|
|
|
|
CEB Inc. Reconciliation of Non-GAAP Financial
Measures (Continued) (In thousands, except per share
data)
|
|
Constant Currency
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2015
|
|
|
|
|
|
|
|
CEB
|
|
|
|
SHL
|
|
|
|
Total
|
Adjusted revenue
|
|
|
|
|
|
|
$
|
181,773
|
|
|
|
$
|
50,880
|
|
|
|
$
|
232,653
|
Currency exchange rate fluctuations
|
|
|
|
|
|
|
|
3,327
|
|
|
|
|
5,370
|
|
|
|
|
8,697
|
Constant currency Adjusted revenue
|
|
|
|
|
|
|
$
|
185,100
|
|
|
|
$
|
56,250
|
|
|
|
$
|
241,350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
|
|
$
|
49,782
|
|
|
|
$
|
10,576
|
|
|
|
$
|
60,358
|
Currency exchange rate fluctuations
|
|
|
|
|
|
|
|
333
|
|
|
|
|
1,734
|
|
|
|
|
2,067
|
Constant currency Adjusted EBITDA
|
|
|
|
|
|
|
$
|
50,115
|
|
|
|
$
|
12,310
|
|
|
|
$
|
62,425
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2015
|
|
|
|
|
|
|
|
CEB
|
|
|
|
SHL
|
|
|
|
Total
|
Adjusted revenue
|
|
|
|
|
|
|
$
|
354,721
|
|
|
|
$
|
99,950
|
|
|
|
$
|
454,671
|
Currency exchange rate fluctuations
|
|
|
|
|
|
|
|
5,953
|
|
|
|
|
9,964
|
|
|
|
|
15,917
|
Constant currency Adjusted revenue
|
|
|
|
|
|
|
$
|
360,674
|
|
|
|
$
|
109,914
|
|
|
|
$
|
470,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
|
|
$
|
94,145
|
|
|
|
$
|
19,350
|
|
|
|
$
|
113,495
|
Currency exchange rate fluctuations
|
|
|
|
|
|
|
|
481
|
|
|
|
|
3,150
|
|
|
|
|
3,631
|
Constant currency Adjusted EBITDA
|
|
|
|
|
|
|
$
|
94,626
|
|
|
|
$
|
22,500
|
|
|
|
$
|
117,126
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20150728006704/en/
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