Corporate Executive Board Buying Back Stock

Originally Published In the News April 24 2008 11:10 AM
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Corporate Executive Board (EXBD-NASDAQ) has been brutally beatdown; is the worst over? The release of important metrics only occurs once a year, and it can really move the stock:

Contract Value growth in the first quarter of 2008 was 8.8%, as a result of new client acquisitions, continued cross-sales to existing clients, and new program launches. The average cross-sell ratio was 3.31, reflecting cross-sell ratios of 3.84 in the Company’s large corporate market and 1.49 for middle market customers. Growth from new clients continued to be strong, as experienced over the past two years, and is tracking toward the high end of its target range. This strong growth came from both the traditional larger company market as well as from the middle market. Growth from new programs is tracking toward annual expectations and growth from cross-sales is tracking below its target at this early point in the year.

Tom Monahan, Chairman and Chief Executive Officer commented, “I’m encouraged by our progress across the first quarter. Contract value growth got off to a solid start, offset by continued overhang from a weaker than expected Q4 2007 and a shift in the seasonality of our renewals. Our performance reflects continuing progress against two of our key priorities: restoring momentum to our North American sales organization and developing products to target new member budgets. At the same time, we have not yet fully realized the results of the sales and service initiatives we are implementing to address our other two priorities: increasing cross-sales at our largest member companies and increasing utilization, especially among new members. These initiatives are just in their early stages and it will take several quarters for the returns to fully materialize. Across the balance of the year, we will remain intensely focused on ensuring that our members and prospective members realize immediate value from our insights and resources – especially as they navigate a very challenging economic environment. We have confidence that we are on the right set of priorities to drive 2008 outcomes and longer-term growth, but we realize that we need very sharp execution given the selling environment that we confront.”

The company’s prodigious cash flow was put to good use buying back stock. And the free cash flow yield has not been this low in years, attracting bargain hunters to the stock. Chasing the stock today might not pay immediate dividends, but the lows are likely in.

The Corporate Executive Board Reports First-Quarter Diluted Earnings Per Share of $0.45 and 10.8% Revenue Growth
Business Wire

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