The Corporate Executive Board Company (CEB) (NASDAQ: EXBD) last week announced financial results for the third quarter ended September 30, 2007. Revenues for the third quarter increased 15.1 percent to $136.3 million from $118.4 million for the third quarter of 2006. Net income increased 1.3 percent to $21.4 million from $21.1 million. Diluted earnings per share for the third quarter of 2007 increased 13.5 percent to $0.59 from $0.52 for the third quarter of 2006.

Tom Monahan, Chief Executive Officer commented, "I'm pleased with the progress we made in the quarter on several fronts, including our ongoing efforts to rebuild the sales force and the quality of those new hires. We ended the quarter with 293 sales teams putting us on track towards our year end goal. There are, however, areas where there is still plenty of work to do, particularly in reducing the time to productivity for those new sales hires and continuing to rebuild our sales pipelines as we enter the fourth quarter. This will have the effect of moving some sales related activities and expenses from the third quarter to the fourth quarter, and resulted in lower than budgeted marketing and member services expense for the third quarter. I remain confident that we will continue to realize measurable returns on the investments we put in place across 2007 and that these investments will set us up for a strong start to 2008."

For the first nine months of 2007, revenues were $390.5 million, a 16.5% increase from $335.1 million for the first nine months of 2006. Net income for the first nine months of 2007 increased 3.7% to $58.1 million from $56.0 million for the first nine months of 2006. Diluted earnings per share for the first nine months of 2007 were $1.54, a 12.4% increase from $1.37 for the first nine months of 2006.

Contract Value growth in the third quarter of 2007 was 16.2%, as a result of continued cross-sales to existing clients, new client acquisitions, and new program launches. The average cross-sell ratio was 3.53, reflecting cross-sell ratios of 4.05 in the Company's large corporate market and 1.31 in the middle market. Growth from new clients continued to be strong as experienced over the past two years, and is tracking towards the high end of its annual guidance range. This strong growth came from both the traditional larger company markets as well as from the middle market. Growth from cross sales and new programs were tracking towards their annual guidance ranges. Companies joining their first CEB program in the quarter included: Red Bull GmbH; Red Wing Shoe Company, Inc.; Swiss International Air Lines; University of California; VeriFone, Inc.; and Wipro Ltd.

New program: Logisics Leadership Board

"Today, I am pleased to announce the fifth of the six to seven membership programs we will launch in 2007, the Logistics Leadership Board (LLB). LLB serves senior executives responsible for managing the distribution networks and activities of our member companies. As with all our new programs, LLB program has benefited enormously from the advice and guidance of our charter members, including senior executives from: Cisco Systems, Inc.; Jabil Circuit, Inc.; Merck & Co., Inc.; Rohm and Haas Company; and Target Corporation. This brings our total number of membership-based programs to 47," said Monahan.

Share Repurchase

During the nine months ended September 30, 2007, the Company repurchased approximately 3,793,000 shares of its common stock at a total cost of $270.8 million. Repurchases will continue to be made in open market and privately negotiated transactions subject to market conditions. No minimum number of shares has been fixed. The Company is funding its share repurchases with cash on hand and cash generated from operations.

Outlook for 2007

The following statements summarize the Company's guidance for 2007. For the fourth quarter of 2007, the Company expects revenues of approximately $143.5-$149.5 million. This will equate to annual revenue growth for 2007 of approximately 16.0-17.5%.

The Company is raising its guidance on annual diluted earnings per share for 2007 to a range of $2.11 to $2.16. Included in this amount is approximately $0.40 of share-based compensation expense. For the fourth quarter of 2007, the Company expects diluted earnings per share of $0.57-$0.62. This includes approximately $0.02 of additional expenses for certain sales activities in the fourth quarter which were originally planned for the third quarter.

For the full year 2007, the Company expects other income of approximately $16.5 to $17.0 million, an effective income tax rate of approximately 38.5% and diluted weighted shares outstanding of approximately 37.0-37.5 million.

The diluted earnings per share, interest income and weighted shares outstanding guidance includes only share repurchases made as of September 30, 2007.

Complete financial release

Follow the link below for the complete financial results release.

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