The Advisory Board Company Reports Results For Quarter Ended June 30, 2014

WASHINGTON, July 31, 2014 /PRNewswire/ -- The Advisory Board Company (NASDAQ: ABCO), a global technology, research, and services company providing a leading cloud-based performance platform for the health care and higher education industries, today announced financial results for the quarter ended June 30, 2014, highlighted by 15% growth in contract value and quarterly revenue.

Robert Musslewhite, Chairman and Chief Executive Officer of The Advisory Board Company, commented, "We are pleased with our solid performance for the quarter and our continued track record of growth.  Our comprehensive portfolio and outstanding service drive tangible results for our members on the problems that are most important to them.  In these times of great complexity in the industries we serve, our members can reliably turn to The Advisory Board Company for measurable, tangible results across a wide range of their operational and strategic issues.  Our 4,500 members vote with their feet, and the 90% member renewal rate we earned this past year is a testament to the value they derive from their work with us."

Revenue for the quarter increased 15% to $141.8 million, from $123.2 million for the quarter ended June 30, 2013.  Contract value increased 15% to $548.4 million as of June 30, 2014, up from $475.8 million as of June 30, 2013.  For the quarter ended June 30, 2014, net loss attributable to common stockholders was $3.2 million, or $0.09 per diluted share, compared to net income attributable to common stockholders of $3.7 million, or $0.10 per diluted share, for the quarter ended June 30, 2013.  For the quarter ended June 30, 2014, adjusted EBITDA was $24.0 million, up from $22.5 million for the quarter ended June 30, 2013.  Adjusted net income for the quarter ended June 30, 2014 was $11.0 million, or $0.30 per diluted share, compared to $11.4 million, or $0.31 per diluted share, for the quarter ended June 30, 2013.  Adjusted EBITDA, adjusted net income, and non-GAAP earnings per diluted share are all non-GAAP financial measures.

Mr. Musslewhite continued, "I am excited to announce our latest new product launch, Crimson Medical Referrals.  For our members, the issue of physician network building and management has come to the fore as an important strategic issue because it serves organizations well today under fee-for-service reimbursements and also in the risk-based models likely to become prevalent in the future.  Yet despite the current and future strategic importance of referrals, most providers conduct them using frustrating and inefficient manual processes that are prone to error. 

Based on technology we acquired last year with Medical Referral Source, Crimson Medical Referrals is a renewable software program that streamlines referral execution, captures independent business, and enhances care coordination across the delivery network.  The program complements our large and growing Crimson Market Advantage membership, and we are optimistic about its potential."

Outlook for Calendar Year 2014 

The Company reaffirmed its previously announced calendar year 2014 guidance for revenue, adjusted EBITDA, and non-GAAP earnings per diluted share.  For calendar year 2014, the Company expects revenue to be in a range of approximately $570 million to $580 million, adjusted EBITDA to be in a range of approximately $97 million to $103 million, and non-GAAP earnings per diluted share to be in a range of approximately $1.14 to $1.25.  For calendar year 2014, the Company expects amortization from acquisition-related intangible assets to be approximately $11 million.  For calendar year 2014, the Company expects an effective tax rate in a range of approximately 38.5% to 39.5%. 

Non-GAAP Financial Measures 

This press release and the accompanying tables present information about the Company's adjusted EBITDA, adjusted net income, and non-GAAP earnings per diluted share, 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 EBITDA" for the three months ended June 30, 2014 and 2013 refers to net income attributable to common stockholders before adjustment for the items set forth in the first table.  The term "adjusted net income" for the three months ended June 30, 2014 and 2013 refers to net income attributable to common stockholders excluding the net of tax effect of the items set forth in the second table below.  The term "non-GAAP earnings per diluted share" for the three months ended June 30, 2014 and 2013 refers to earnings per diluted share excluding the net of tax effect of the items set forth in the third table below. 

A reconciliation of the foregoing historical non-GAAP financial measures to the most directly comparable historical GAAP financial measures is provided below for each of the periods indicated.  It is not practicable to provide a reconciliation of forecasted adjusted EBITDA or non-GAAP earnings per diluted share 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 loss of unconsolidated entity, and gains and losses on investment in common stock warrants, cannot reasonably be estimated or predicted at this time.

Web and Conference Call Information

As previously announced, the Company will hold a conference call to discuss its first quarter performance this evening, July 31, 2014, 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 Thursday, July 31, 2014, until 11:00 p.m. Eastern Time on Thursday, August 7, 2014.

About The Advisory Board Company

The Advisory Board Company is a global research, technology, and consulting firm partnering with 4,500 organizations and more than 200,000 leaders across health care and higher education.  Through its innovative membership model, the Company collaborates with executives and their teams to elevate performance and solve their most pressing challenges.  The Company provides strategic guidance, actionable insights, web-based software solutions, and comprehensive implementation and management services.  For more information, visit the firm's website, www.advisory.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements, including the Company's expectations regarding its revenue, adjusted EBITDA, non-GAAP earnings per diluted share, stock-based compensation expense, amortization of acquisition-related intangibles, and effective tax rate for calendar year 2014 are based on information available to the Company as of July 31, 2014, the date of this news release, as well as the Company's current projections, forecasts, and assumptions, and are subject to 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 or implied 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 or implied by the 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 the Company's software tools and management and advisory services, risks relating to privacy, information security, and other health care-related laws and standards, maintaining our third-party provider relationships and strategic alliances, our ability to license technology from third parties, impairment of goodwill, and various factors related to income and other taxes, as well as other risks and uncertainties described in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2014, which is available for review on the Company's website at www.advisory.com/IR and at the Securities and Exchange Commission'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, 2014, which will be filed with the Securities and Exchange Commission in August 2014. 

Accordingly, readers are cautioned not to place undue reliance on the forward-looking statements made in this news release, which speak only as of the date of this news release. 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.

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SOURCE The Advisory Board Company