ADVISORY BOARD CO

CIK:0001157377|SEC Filings

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Statement [Abstract]
Revenue	$ 183,126	$ 200,455	$ 577,964	$ 599,572
Costs and expenses:
Cost of services, excluding depreciation and amortization	95,849	104,215	296,279	296,604
Member relations and marketing	31,359	32,706	97,455	97,819
General and administrative	41,416	32,227	124,979	96,274
Depreciation and amortization	20,479	19,173	64,458	57,857
Operating (loss) income	(5,977)	12,134	(5,207)	51,018
Other expense:
Interest expense	(4,638)	(4,530)	(13,868)	(13,738)
Other income (expense), net	436	(1,516)	579	(2,380)
Total other expense, net	(4,202)	(6,046)	(13,289)	(16,118)
(Loss) income before benefit (provision) for income taxes and gains (losses) from equity method investments	(10,179)	6,088	(18,496)	34,900
Benefit (provision) for income taxes	3,908	(3,279)	7,313	(13,812)
Gains from equity method investments	6,956	34,729	46,269	34,284
Net income	$ 685	$ 37,538	$ 35,086	$ 55,372
Earnings per share
Net income per share—basic (in dollars per share)	$ 0.02	$ 0.94	$ 0.87	$ 1.36
Net income per share—diluted (in dollars per share)	$ 0.02	$ 0.93	$ 0.85	$ 1.35
Weighted average number of shares outstanding:
Basic (in shares)	40,706	40,102	40,517	40,651
Diluted (in shares)	41,634	40,492	41,381	40,977

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash flows from operating activities:
Net income	$ 35,086	$ 55,372
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	64,458	57,857
Amortization of debt issuance costs	835	864
Deferred income taxes	5,847	(9,776)
Excess tax benefit from stock-based awards	(518)	(3,925)
Stock-based compensation expense	16,931	22,914
Loss on cost method investment	0	1,800
Gain on partial sale of equity method investment	(42,312)	(29,679)
Gains from equity method investments	(3,957)	(4,605)
Changes in operating assets and liabilities (net of the effect of acquisitions):
Membership fees receivable	78,129	(16,460)
Prepaid expenses and other current assets	(8,500)	12,098
Deferred incentive compensation and other charges	20,396	14,495
Deferred revenue	(81,057)	(17,382)
Accounts payable and accrued liabilities	(36,989)	(9,898)
Acquisition-related earn-out payments	(196)	(1,432)
Accrued incentive compensation	(6,836)	(17,047)
Other long-term liabilities	3,792	1,263
Net cash provided by operating activities	45,109	56,459
Cash flows from investing activities:
Purchases of property and equipment	(23,224)	(34,808)
Capitalized external-use software development costs	(1,826)	(2,434)
Cash paid for acquisitions	0	(1,900)
Cash received from partial sale of equity method investment	71,871	48,565
Net cash provided by investing activities	46,821	9,423
Cash flows from financing activities:
Proceeds from debt	0	17,000
Pay down of debt	(35,937)	(38,562)
Proceeds from issuance of common stock from exercise of stock options	9,980	3,337
Withholding of shares to satisfy employee tax withholding on stock-based compensation	(5,752)	(3,473)
Proceeds from issuance of common stock under employee stock purchase plan	272	370
Acquisition-related earn-out payments	(186)	(3,600)
Excess tax benefits from stock-based awards	0	3,925
Purchases of treasury stock	0	(61,616)
Net cash used in financing activities	(31,623)	(82,619)
Net increase (decrease) in cash and cash equivalents	60,307	(16,737)
Cash and cash equivalents, beginning of period	91,151	71,825
Cash and cash equivalents, end of period	$ 151,458	$ 55,088

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 151,458	$ 91,151
Membership fees receivable, net	527,387	605,517
Prepaid expenses and other current assets	27,525	18,965
Total current assets	706,370	715,633
Construction in progress	148,019	63,368
Property and equipment, net	147,181	171,281
Intangible assets, net	239,745	255,053
Deferred incentive compensation and other charges	52,425	72,178
Goodwill	737,023	739,507
Equity method investments	20,699	19,858
Total assets	2,051,462	2,036,878
Current liabilities:
Deferred revenue, current	514,516	564,237
Accounts payable and accrued liabilities	54,652	67,702
Accrued incentive compensation	18,686	25,521
Debt, current	70,978	49,347
Total current liabilities	658,832	706,807
Deferred revenue, net of current portion	139,021	170,357
Deferred income taxes	91,352	89,013
Debt, net of current portion	415,902	472,739
Financing obligation	148,019	63,368
Other long-term liabilities	22,825	17,550
Total liabilities	1,475,951	1,519,834
Stockholders’ equity:
Preferred stock, par value $0.01; 5,000,000 shares authorized, zero shares issued and outstanding	0	0
Common stock, par value $0.01; 135,000,000 shares authorized, 40,758,952 and 40,192,980 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively	408	402
Additional paid-in capital	805,964	782,399
Accumulated deficit	(231,878)	(266,218)
Accumulated other comprehensive income	1,017	461
Total stockholders’ equity	575,511	517,044
Total liabilities and stockholders’ equity	$ 2,051,462	$ 2,036,878