8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 2, 2010

THE CORPORATE EXECUTIVE BOARD COMPANY

(Exact name of registrant as specified in its charter)

Delaware	000-24799	52-2056410
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1919 North Lynn Street, Arlington, Virginia	22209
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (571) 303-3000

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On August 2, 2010, The Corporate Executive Board Company issued a press release with respect to its earnings for the three and six months ended June 30, 2010 and raised 2010 guidance. A copy of the Company’s press release is attached hereto and furnished as Exhibit 99.1.

Presentation slides used during the Company’s investor conference call, set for August 3, 2010, at 9:00 a.m. EST., may be accessed at http://ir.executiveboard.com/phoenix.zhtml?p=irol-eventDetails&c=113226&eventID=3230863 no later than the starting time of the conference call.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	The Corporate Executive Board Company’s press release for second quarter 2010 earnings.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	The Corporate Executive Board Company (Registrant)
Date: August 2, 2010	By:	/s/ Richard S. Lindahl
		Richard S. Lindahl
		Chief Financial Officer

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Exhibit Index

Exhibit No.	Description
99.1	The Corporate Executive Board Company’s press release for second quarter 2010 earnings.

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EX-99.1

Exhibit 99.1

Contact:	Richard S. Lindahl
	Chief Financial Officer	1919 North Lynn Street
	(571) 303-6956	Arlington, Virginia 22209
	jconnor@executiveboard.com	www.exbd.com

THE CORPORATE EXECUTIVE BOARD REPORTS SECOND QUARTER RESULTS
AND RAISES 2010 GUIDANCE

ARLINGTON, Va. — (August 2, 2010) — The Corporate Executive Board Company (“CEB” or the “Company”) (NASDAQ: EXBD) today announces financial results for the second quarter and six months ended June 30, 2010. Revenues decreased 1.0% to $109.6 million for the second quarter of 2010 from $110.7 million for the second quarter of 2009. Net income for the second quarter of 2010 was $11.0 million, or $0.32 per diluted share, compared to $4.9 million, or $0.14 per diluted share, for the same period of 2009. Included in net income for the second quarter of 2009 are pre-tax charges of $11.5 million for non-cash costs associated with exit activities and $4.2 million of restructuring costs resulting from a voluntary separation program. Excluding these charges, net of tax, adjusted net income was $14.4 million and non-GAAP diluted earnings per share was $0.41 for the second quarter of 2009.

For the first six months of 2010, revenues were $209.8 million, an 8.1% decrease from $228.1 million for the first six months of 2009. Net income for the first six months of 2010 increased to $22.6 million from $18.0 million for the same period in 2009. Diluted earnings per share for the first six months of 2010 was $0.66, an increase from $0.53 for the same period in 2009. Excluding the effects, net of tax, of costs associated with exit activities and restructuring costs, adjusted net income was $28.0 million and non-GAAP diluted earnings per share was $0.82 for the first six months of 2009.

Contract Value at June 30, 2010 increased 2.1% as compared to June 30, 2009 as a result of an increase in the purchase of memberships by middle market clients, the acquisitions of Tower Group and Iconoculture, and improved cross-sales of large corporate memberships. As previously discussed, growth from these factors was offset to some degree by reductions in contract value as a result of discontinued programs. The average cross-sell ratio was 2.89, reflecting cross-sell ratios of 3.29 for the traditional large corporate market and 1.91 for middle market customers.

“We continue to see encouraging returns from focus on our priorities and great execution by our teams,” said Thomas Monahan, Chairman and Chief Executive Officer. “By linking great research and data to urgent member work and decisions, our teams have driven strong renewal outcomes and solid progress on sales. In light of these trends, we are updating our 2010 outlook to reflect continued improvement in our performance and to incorporate the impact of the previously-announced Iconoculture acquisition.”

OUTLOOK FOR 2010

The Company updates its 2010 annual guidance as follows: Revenues of $430 to $440 million; Non-GAAP diluted earnings per share of $1.20 to $1.35; Depreciation and amortization expense of $19.0 to $21.0 million; capital expenditures of approximately $6.0 to $8.0 million; and an Adjusted EBITDA margin of between 21.5% and 23.5%.

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NON-GAAP FINANCIAL MEASURES

This press release and the accompanying tables include a discussion of EBITDA, Adjusted EBITDA, Adjusted net income, and Non-GAAP diluted earnings per 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 “EBITDA” refers to a financial measure that we define as earnings before interest income, net, depreciation and amortization, and provision for income taxes. The term “Adjusted EBITDA” refers to a financial measure that we define as earnings before interest income, net, depreciation and amortization, provision for income taxes, impairment loss, costs associated with exit activities, restructuring costs, and gain on acquisition. The term “Adjusted net income” refers to net income excluding the after tax effects of impairment loss, costs associated with exit activities, restructuring costs, and gain on acquisition. “Non-GAAP diluted earnings per share” refers to net income excluding the after tax per share effects of impairment loss, costs associated with exit activities, restructuring costs, and gain on acquisition.

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 GAAP results is provided below.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2010			2009			2010			2009
Net income	$	10,980		$	4,946		$	22,613		$	18,018
Interest income, net		(363	)		(475	)		(799	)		(1,073	)
Depreciation and amortization		5,639			6,263			10,774			12,236
Provision for income taxes		7,923			3,297			16,108			12,015
EBITDA	$	24,179		$	14,031		$	48,696		$	41,196
Costs associated with exit activities		—			11,518			—			11,518
Restructuring costs		—			4,244			—			5,188
Adjusted EBITDA	$	24,179		$	29,793		$	48,696		$	57,902

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2010		2009		2010		2009
Net income	$	10,980	$	4,946	$	22,613	$	18,018
Adjustments, net of tax:
Costs associated with exit activities		—		6,911		—		6,911
Restructuring costs		—		2,546		—		3,113
Adjusted net income	$	10,980	$	14,403	$	22,613	$	28,042

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	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2010		2009		2010		2009
GAAP diluted earnings per share	$	0.32	$	0.14	$	0.66	$	0.53
Adjustments, net of tax:
Costs associated with exit activities		—		0.20		—		0.20
Restructuring costs		—		0.07		—		0.09
Non-GAAP diluted earnings per share	$	0.32	$	0.41	$	0.66	$	0.82

With respect to the Company’s 2010 annual guidance, reconciliations of Non-GAAP diluted earnings per share to GAAP diluted earnings per share, Adjusted net income to net income, and Adjusted EBITDA to Net income as projected for 2010 are not provided because CEB cannot, without unreasonable effort, determine the components of GAAP diluted earnings per share and net income to provide reconciliations to Non-GAAP diluted earnings per share and Adjusted EBITDA for its 2010 fiscal year with certainty at this time.

We believe that EBITDA, Adjusted EBITDA, Adjusted net income, and Non-GAAP diluted earnings per share are relevant and useful supplemental information for our investors. We use these non-GAAP financial measures for internal budgeting and other managerial purposes, when publicly providing the Company’s business outlook and as a measurement for potential acquisitions. A limitation associated with EBITDA and Adjusted EBITDA is that they do not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our business. Management evaluates the costs of such tangible and intangible assets through other financial measures such as capital expenditures. Management compensates for these limitations by also relying on the comparable GAAP financial measure of Income from operations, which includes depreciation and amortization.

FORWARD-LOOKING STATEMENTS

This news 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. 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 U.S. Securities and Exchange Commission, 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 member needs and demands, our potential inability to attract and retain a significant number of highly skilled employees, risks associated with the results of restructuring plans, fluctuations in operating results, our potential inability to protect our intellectual property rights, 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 or assumptions used to prepare our financial statements, our potential inability to make, integrate and maintain acquisitions and investments, the amount and timing of the benefits expected from acquisitions and investments, our potential inability to effectively anticipate, plan for and respond to changing economic and financial markets conditions, especially in light of ongoing uncertainty in the worldwide economy and possible volatility of our stock price. These and other factors 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 U.S. Securities and Exchange Commission, including, but not limited to, our 2009 Annual Report on Form 10-K. The forward-looking statements in this press release are made as of August 2, 2010, and we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

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ABOUT THE CORPORATE EXECUTIVE BOARD COMPANY

The Corporate Executive Board drives faster, more effective decision making among the world’s leading executives and business professionals. As the premier, network-based knowledge resource, The Corporate Executive Board provides customers with the authoritative and timely guidance needed to excel in their roles, take decisive action and improve company performance. Powered by an executive network that spans more than 50 countries and represents approximately 85% of the world’s Fortune 500 companies, The Corporate Executive Board offers unique research insights along with an integrated suite of exclusive tools and resources that enable the world’s most successful organizations to deliver superior business outcomes. For more information, visit www.exbd.com.

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THE CORPORATE EXECUTIVE BOARD COMPANY

Financial Highlights
(In thousands, except per share data)
(Unaudited)

	Selected			Three Months Ended				Selected			Six Months Ended
	Percentage			June 30,				Percentage			June 30,
	Changes			2010		2009		Changes			2010		2009
Financial Highlights (GAAP, as reported):
Revenues		(1.0	)%	$	109,577	$	110,695		(8.1	)%	$	209,752	$	228,135
Net income				$	10,980	$	4,946				$	22,613	$	18,018
Basic earnings per share				$	0.32	$	0.15				$	0.66	$	0.53
Diluted earnings per share				$	0.32	$	0.14				$	0.66	$	0.53
Weighted average shares outstanding:
Basic					34,214		34,105					34,189		34,081
Diluted					34,469		34,276					34,458		34,190

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THE CORPORATE EXECUTIVE BOARD COMPANY

Operating Statistic and Statements of Operations
(In thousands, except per share data)
(Unaudited)

	Selected			Three Months Ended						Selected			Six Months Ended
	Percentage			June 30,						Percentage			June 30,
	Changes			2010			2009			Changes			2010			2009
Operating Statistic
Contract Value (1) (at period end)		2.1	%	$	410,117		$	401,594
Financial Highlights
Revenues		(1.0	)%	$	109,577		$	110,695			(8.1	)%	$	209,752		$	228,135
Cost and expenses:
Cost of services					39,283			37,951						72,795			76,228
Member relations and marketing					30,155			31,729						55,935			66,539
General and administrative					14,808			14,891						30,280			30,627
Depreciation and amortization					5,639			6,263						10,774			12,236
Costs associated with exit activities					—			11,518						—			11,518
Restructuring costs					—			4,244						—			5,188
Total costs and expenses					89,885			106,596						169,784			202,336
Income from operations					19,692			4,099						39,968			25,799
Other (expense) income, net (2)					(789	)		4,144						(1,247	)		4,234
Income before provision for income taxes					18,903			8,243						38,721			30,033
Provision for income taxes					7,923			3,297						16,108			12,015
Net income				$	10,980		$	4,946					$	22,613		$	18,018
Basic earnings per share				$	0.32		$	0.15					$	0.66		$	0.53
Diluted earnings per share				$	0.32		$	0.14					$	0.66		$	0.53
Weighted average shares outstanding
Basic					34,214			34,105						34,189			34,081
Diluted					34,469			34,276						34,458			34,190
Percentages of Revenues
Cost of services					35.8	%		34.3	%					34.7	%		33.4	%
Member relations and marketing					27.5	%		28.7	%					26.7	%		29.2	%
General and administrative					13.5	%		13.5	%					14.4	%		13.4	%
Depreciation and amortization					5.1	%		5.7	%					5.1	%		5.4	%
Income from operations					18.0	%		3.7	%					19.1	%		11.3	%
EBITDA (3)					22.1	%		12.7	%					23.2	%		18.1	%
Adjusted EBITDA (3)					22.1	%		26.9	%					23.2	%		25.4	%

(1)	We define “Contract Value” as of the quarter-end as the aggregate annualized revenue attributed to all agreements in effect on such date, without regard to the remaining duration of any such agreement.
(2)	Other (expense) income, net for the three months ended June 30, 2010 includes $0.4 million of interest income and $0.1 million of foreign currency gain offset by a $0.9 million decrease in the fair value of deferred compensation plan assets and $0.4 million of other expense. Other (expense) income for the three months ended June 30, 2009 includes $0.5 million of interest income, $2.2 million foreign currency gain, and a $1.4 million increase in the fair value of deferred compensation plan assets. Other (expense) income, net for the six months ended June 30, 2010 includes $0.8 million of interest income offset by a $0.3 million decrease in the fair value of deferred compensation plan assets, a $0.8 million foreign currency loss, and $0.9 million of other expense. Other (expense) income, net for the six months ended June 30, 2009 includes $1.1 million of interest income, $0.8 million increase in the fair value of deferred compensation plan assets, $1.9 million foreign currency gain and $0.4 million of other income.
(3)	See “NON-GAAP FINANCIAL MEASURES” for further explanation.

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THE CORPORATE EXECUTIVE BOARD COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

	June 30, 2010		December 31, 2009
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	89,456	$	31,760
Marketable securities		7,168		18,666
Membership fees receivable, net		80,922		125,716
Deferred income taxes		7,887		7,989
Deferred incentive compensation		12,323		9,721
Prepaid expenses and other current assets		9,096		9,584
Total current assets		206,852		203,436
Deferred income taxes		41,934		39,744
Marketable securities		16,385		25,784
Property and equipment, net		83,073		89,462
Goodwill		38,109		27,129
Intangible assets, net		18,245		12,246
Other non-current assets		28,045		25,394
Total assets	$	432,643	$	423,195
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued liabilities	$	36,884	$	48,764
Accrued incentive compensation		23,809		27,975
Deferred revenues		227,219		222,053
Total current liabilities		287,912		298,792
Deferred income taxes		1,008		867
Other liabilities		75,626		73,259
Total liabilities		364,546		372,918
Total stockholders’ equity		68,097		50,277
Total liabilities and stockholders’ equity	$	432,643	$	423,195

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THE CORPORATE EXECUTIVE BOARD COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

	Six Months Ended
	June 30,
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	22,613		$	18,018
Adjustments to reconcile net income to net cash flows provided by operating activities:
Costs associated with exit activities		—			11,518
Depreciation and amortization		10,774			12,236
Deferred income taxes		(1,948	)		(2,486	)
Share-based compensation		3,174			6,320
Amortization of marketable securities premiums, net		221			342
Changes in operating assets and liabilities:
Membership fees receivable, net		47,169			59,488
Deferred incentive compensation		(2,602	)		2,790
Prepaid expenses and other current assets		846			(267	)
Other non-current assets		(2,651	)		(874	)
Accounts payable and accrued liabilities		(18,111	)		(27,954	)
Accrued incentive compensation		(4,166	)		(11,607	)
Deferred revenues		(1,568	)		(48,344	)
Other liabilities		2,366			587
Net cash flows provided by operating activities		56,117			19,767
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(1,217	)		(3,914	)
Acquisition of businesses, net of cash acquired		(8,957	)		(168	)
Maturities of marketable securities		20,284			12,805
Net cash flows provided by investing activities		10,110			8,723
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of common stock under the employee stock purchase plan		153			450
Purchases of treasury shares		(1,167	)		(81	)
Payment of dividends		(7,517	)		(18,377	)
Net cash flows used in financing activities		(8,531	)		(18,008	)
NET INCREASE IN CASH AND CASH EQUIVALENTS		57,696			10,482
Cash and cash equivalents, beginning of period		31,760			16,214
Cash and cash equivalents, end of period	$	89,456		$	26,696