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Advisory Board Company (ABCO) filed Quarterly Report for the period ended 2011-12-31.
Advisory Board Company has a market cap of $1.2 billion; its shares were traded at around $73.985 with a P/E ratio of 43 and P/S ratio of 4.1. Advisory Board Company had an annual average earning growth of 1.4% over the past 10 years.
This is the annual revenues and earnings per share of ABCO over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of ABCO.
Highlight of Business Operations:
Adjusted Net Income and Adjusted EBITDA. Adjusted net income increased 58.0% from $6.7 million in the three months ended December 31, 2010 to $10.6 million in the three months ended December 31, 2011, and adjusted EBITDA increased 67.3% from $11.6 million in the three months ended December 31, 2010 to $19.3 million in the three months ended December 31, 2011. Adjusted net income increased 36.5% from $21.0 million in the nine months ended December 31, 2010 to $28.7 million in the nine months ended December 31, 2011, and adjusted EBITDA increased 41.9% from $36.0 million in the nine months ended December 31, 2010 to $51.1 million in the nine months ended December 31, 2011. The increases in adjusted net income and adjusted EBITDA were due to increased revenue, the effect of which was partially offset by increasing new product development costs, including the costs associated with the launch of new programs and with an increase in the number of new sales teams.Revenue. Total revenue increased 33.0% from $75.2 million in the three months ended December 31, 2010 to $100.0 million in the three months ended December 31, 2011, and contract value increased 28.8% to $386.6 million as of December 31, 2011 from $300.2 million as of December 31, 2010. Total revenue increased 28.9% from $213.0 million in the nine months ended December 31, 2010 to $274.6 million in the nine months ended December 31, 2011. The increases in revenue and contract value were primarily attributable to the introduction and expansion of new programs, including our August 1, 2011 acquisition of PivotHealth, LLC, or “PivotHealth,” our cross-selling of existing programs to existing members, and, to a lesser degree, price increases. We offered 53 membership programs as of December 31, 2011 and 48 membership programs as of December 31, 2010.
Cost of services. Cost of services increased from $41.2 million in the three months ended December 31, 2010 to $54.2 million in the three months ended December 31, 2011. As a percentage of revenue, cost of services was 54.8% for the three months ended December 31, 2010 and 54.2% for the three months ended December 31, 2011. The increase of $13.0 million in cost of services for the three months ended December 31, 2011 was primarily due to growth and expansion of our Crimson and Southwind programs in addition to an increase of $4.0 million from programs acquired in 2011. Cost of services increased from $113.0 million in the nine months ended December 31, 2010 to $152.2 million in the nine months ended December 31, 2011. As a percentage of revenue, cost of services was 53.1% for the nine months ended December 31, 2010 and 55.4% for the nine months ended December 31, 2011. The increase of $39.1 million in cost of services for the nine months ended December 31, 2011 was primarily due to growth and expansion of our Crimson and Southwind programs, an increase of $7.7 million from programs acquired in 2011, and $5.3 million in fair value adjustments to our acquisition-related earn-out liabilities.
Member relations and marketing. Member relations and marketing expense increased 7.9% from $17.1 million in the three months ended December 31, 2010 to $18.4 million in the three months ended December 31, 2011. As a percentage of revenue, member relations and marketing expense in the three months ended December 31, 2010 and 2011 was 22.7% and 18.4%, respectively. Member relations and marketing expense increased 13.6% from $48.4 million in the nine months ended December 31, 2010 to $54.9 million in the nine months ended December 31, 2011. As a percentage of revenue, member relations and marketing expense in the nine months ended December 31, 2010 and 2011 was 22.7% and 20.0%, respectively. The increases in member relations and marketing expense were primarily attributable to an increase in sales staff and related travel and other associated costs, as well as an increase in member relations personnel and related costs required to serve our expanding membership base. During the three months ended December 31, 2011 and 2010, we had an average of 146 and 133 new business development teams, respectively.
General and administrative. General and administrative expense increased from $9.7 million in the three months ended December 31, 2010 to $12.4 million in the three months ended December 31, 2011. As a percentage of revenue, general and administrative expense decreased to 12.4% in the three months ended December 31, 2011 from 13.0% in the three months ended December 31, 2010. The increase of $2.6 million in general and administrative costs for the three months ended December 31, 2011 was primarily attributable to an increase in share-based compensation of $0.6 million and increased costs incurred to improve our finance, information technology, and facility operations infrastructure to support our growing employee base and number of office locations. General and administrative expense increased from $27.6 million in the nine months ended December 31, 2010 to $35.1 million in the nine months ended December 31, 2011. As a percentage of revenue, general and administrative expense was 13.0% and 12.8% in the nine months ended December 31, 2010 and 2011, respectively. The increase of $7.5 million in general and administrative costs for the nine months ended December 31, 2011 was primarily attributable to an increase in new product development costs of $2.4 million, which includes $0.7 million in legal costs relating to our acquisitions of PivotHealth and Cielo MedSolutions, LLC, or “Cielo,” and formation of Evolent, an increase in share-based compensation of $1.0 million, and, to a lesser extent, increased recruiting, human resources, and finance personnel costs incurred to support our growing employee base.
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