The Advisory Board Company Reports Results For Quarter And Fiscal Year Ended March 31, 2014

WASHINGTON, May 8, 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 March 31, 2014, highlighted by 16% growth in Contact Value, 15% growth in quarterly revenue, and a 90% member renewal rate.

Robert Musslewhite, Chairman and Chief Executive Officer of The Advisory Board Company, commented, "We are pleased with our performance for both the quarter and the fiscal year, as the business momentum we saw at the end of calendar 2013 continued through the March quarter.  All of the key metrics that gauge the health of the business—revenue growth, contract value growth, membership base expansion, renewal rate, margins, and future growth investment—illustrate our strong, scalable business model and a virtuous cycle where members, deriving measurable impact from their work with us, not only renew their memberships but also extend their work with us in deeper and more comprehensive ways.  These deeper relationships allow us to understand their needs even better and deliver even more impact, spurring greater loyalty and cross-sales which drive ongoing company growth as well as the expansion of our footprint and impact.  Our overall growth strategy is predicated on this cycle, and we are thrilled to see it continue this year."                                                                                                                               

Revenue for the quarter increased 15% to $138.0 million, from $119.7 million for the quarter ended March 31, 2013.  Contract value increased 16% to $541.9 million as of March 31, 2014, up from $466.3 million as of March 31, 2013.  For the quarter ended March 31, 2014, net income attributable to common stockholders was $8.3 million, or $0.22 per diluted share, compared to net income attributable to common stockholders of $6.5 million, or $0.18 per diluted share, for the quarter ended March 31, 2013.  For the quarter ended March 31, 2014, adjusted EBITDA was $26.0 million, up from $23.1 million for the quarter ended March 31, 2013.  Adjusted net income for the quarter ended March 31, 2014 was $12.6 million, or $0.34 per diluted share, compared to $12.3 million, or $0.34 per diluted share, for the quarter ended March 31, 2013.  Adjusted EBITDA, adjusted net income, and non-GAAP earnings per diluted share are all non-GAAP financial measures.

For the fiscal year ended March 31, 2014, revenue increased 16% to $520.6. million, from $450.8 million for the fiscal year ended March 31, 2013. Net income attributable to common stockholders was $24.8 million, or $0.67 per diluted share, for the fiscal year ended March 31, 2014, compared to net income attributable to common stockholders of $23.4 million, or $0.64 per diluted share, for the prior fiscal year.  For the fiscal year ended March 31, 2014, adjusted EBITDA was $92.2 million, up from $84.4 million for the fiscal year ended March 31, 2013.  Adjusted net income for the fiscal year ended March 31, 2014 was $44.9 million, or $1.22 per diluted share, compared to $45.4 million, or $1.25 per diluted share, for the fiscal year ended March 31, 2013. 

Mr. Musslewhite continued, "I am also excited to announce the launch of the Population Health Advisor Program, a renewable subscription-based research program for the executives and teams charged with executing the care transformation agenda.  It provides best practice research, peer networking, and customized assessments to help our members develop the competencies needed to manage patients profitably under value- and risk-based systems.  The program's resources and experts support members in prioritizing, executing, and monitoring progress of critical population health initiatives, including optimizing primary care and establishing the medical home model, segmenting patients for more effective care management, and developing post-acute care network strategy.  The initiative is a strong complement to our broader industry-leading, cloud-based performance analytics platform and set of capabilities to help providers with all aspects of population health.  It is seeing strong traction in the market, and we are confident in the value that it will provide to members."

Outlook for Calendar Year 2014 

The Company is reaffirming its revenue guidance range of approximately $570 million to $580 million for calendar year 2014.  The Company is revising its guidance for 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, based on projected dilution and integration expenses from an acquisition that closed on May 5^th.  For calendar year 2014, the Company expects stock-based compensation expense to be approximately $22 million, and expects amortization from acquisition-related intangible assets to be approximately $11 million.  For calendar year 2014, the Company continues to expect 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 and twelve months ended March 31, 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 and twelve months ended March 31, 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 and twelve months ended March 31, 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 fourth quarter and fiscal year performance this evening, May 8, 2014, at 5:00 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 888.317.6016.  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, May 8, until 11:00 p.m. Eastern Time on Thursday, May 15, 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 May 8, 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, 2013, 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-K for the fiscal year ended March 31, 2014, which will be filed with the Securities and Exchange Commission in May 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.

SOURCE The Advisory Board Company

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