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): October 30, 2015
The Advisory Board Company
(Exact name of registrant as specified in its charter)
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Delaware |
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000-33283 |
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52-1468699 |
(State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
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2445 M Street, NW
Washington, District of Columbia |
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20037 |
(Address of principal executive offices) |
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(Zip Code) |
Registrants telephone number, including area code: (202) 266-5600
Not Applicable
(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 (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement
Amendment to Credit Agreement
On October 30, 2015,
The Advisory Board Company (the Company) entered into Amendment No. 2 (the Amendment) to its Credit Agreement, dated as of February 6, 2015 (as amended, the Credit Agreement), with the lenders party
thereto, including JPMorgan Chase Bank, N.A., the Administrative Agent, in order to reduce the borrowing rates on the existing term loan and revolving credit facility and to increase the amount available for borrowing under the revolving credit
facility, among other matters.
As reported in Item 1.01 of the Companys current report on Form 8-K filed with the Securities and Exchange
Commission on February 10, 2015, the lenders under the Credit Agreement on February 6, 2015 provided the Company with $675 million of senior secured credit facilities (the Credit Facilities). On that date, the Credit Facilities
consisted of (a) a five-year senior secured term loan facility in the principal amount of $575 million (as amended from time to time, the Term Facility) and (b) a five-year senior secured revolving credit facility (as amended
from time to time, the Revolving Facility) under which up to $100 million in principal amount of borrowings and other credit extensions may be outstanding at any time. Prior to the Amendment, the outstanding principal amount of the Term
Facility was approximately $560.6 million, and no amounts were outstanding under the Revolving Facility. Pursuant to the Amendment, on October 30, 2015, the amount available for borrowing under the Revolving Facility was increased from $100
million to $200 million. On that date, the Company also borrowed $100 million under the Revolving Facility and used all of the proceeds from such borrowing to repay a portion of the outstanding principal amount of the Term Facility. Upon
consummation of this prepayment transaction, $460.6 million in aggregate principal amount remained outstanding under the Term Facility.
The Company is
the borrower under the Credit Facilities. The Companys obligations under the Credit Facilities are guaranteed by the Companys domestic subsidiaries, subject to certain exceptions, and the obligations of the Company and the subsidiary
guarantors under the Credit Facilities are secured by a first-priority security interest in substantially all of the assets of the Company and such domestic subsidiaries.
Pursuant to the Amendment, commencing on October 30, 2015, amounts drawn under the Term Facility generally bear interest at an annual rate calculated, at
the Companys option, on the basis of either (a) an alternate base rate plus an initial margin of 1.25% or (b) the applicable London interbank offered rate (LIBOR) plus an initial margin of 2.25%, subject in each case to
margin reductions based on the Companys total leverage ratio. The interest rate on the alternate base rate loans will fluctuate as the base rate fluctuates, while the interest rate on the LIBOR loans will be adjusted at the end of each
applicable interest period. Interest on alternate base rate loans will be payable quarterly in arrears, while interest on LIBOR loans will be payable at the end of each applicable interest period, except that, in the case of any interest period
longer than three months, interest will be payable at the end of each three-month period.
Pursuant to the Amendment, commencing on October 30, 2015,
amounts drawn under the Revolving Facility also generally bear interest at an annual rate calculated, at the Companys option, on the basis of either (a) an alternate base rate plus an initial margin of 1.25% or (b) the applicable
London interbank offered rate plus an initial margin of 2.25%, subject in each case to margin reductions based on the Companys total leverage ratio.
The borrowing rates provided for in the Amendment as set forth above in each case represent a decrease of 50 basis points in the specified interest rate
margins as compared to the previously applicable interest rate margins.
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In connection with the Amendment, the Company paid each lender party to the Credit Agreement a consent fee equal
to 0.02% of the amount loaned or committed for loan by such lender upon consummation of the transactions described above. The Company also paid an upfront fee equal to 0.30% of any increase in the amount loaned or committed for loan to any lender
whose amount loaned or committed for loan increased as a result of the Amendment.
Certain of the lenders under the Credit Facilities and their affiliates
previously have performed and in the future may perform financial advisory, commercial banking and investment banking services for the Company, for which they have received for past services, and are expected to receive for future services,
customary fees and expense reimbursements.
A copy of the Amendment is filed as Exhibit 10.1 to this report. The foregoing description is not complete and
is subject to and qualified in its entirety by reference to the text of the Amendment.
The information set forth under Item 2.03 of this report is
incorporated by reference in this Item 1.01.
Item 2.02 Results of Operations and Financial Condition
On November 5, 2015, the Company issued a news release announcing its financial results for the fiscal quarter ended September 30, 2015. A copy of
the Companys news release is furnished as Exhibit 99.1 to this report.
Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The information set forth under Item 1.01 of this report is incorporated by reference in this Item 2.03.
On October 30, 2015, upon execution of the Amendment and consummation of the borrowing and prepayment transactions described in Item 1.01 of this
report, the Company became obligated as the borrower, and certain of the Companys domestic subsidiaries became obligated as guarantors, under $100 million in principal amount of senior secured indebtedness outstanding under the Revolving
Facility. Subject to conditions of availability established under the Credit Agreement, the Company may become obligated as the borrower, and certain of the Companys domestic subsidiaries may become obligated as guarantors, under up to an
additional $100 million in principal amount of senior secured indebtedness outstanding under the Revolving Facility at any time.
On October 30,
2015, upon execution of the Amendment and consummation of the borrowing and prepayment transactions described in Item 1.01 of this report, the Company remained obligated as the borrower, and certain of the Companys domestic subsidiaries
remained obligated as guarantors, under $460.6 million in principal amount of senior secured indebtedness outstanding under the Term Facility.
The
payment of all outstanding principal, interest and other amounts outstanding from time to time under the Credit Facilities may be declared immediately due and payable upon the occurrence of an event of default under the Credit Agreement. The Credit
Facilities contain customary events of default, including an event of default upon a change of control of the Company. An event of default also will occur under the Credit Facilities, subject to customary grace periods for some covenants, if the
Company or, in some cases, a subsidiary guarantor or other subsidiary fails to make payments when due, makes a material misrepresentation, fails to comply with affirmative or negative covenants, defaults on other material indebtedness, fails to
discharge material judgments, becomes subject to certain claims under ERISA, fails to comply with certain material agreements, or, in the case of the Company or a material subsidiary,
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becomes subject to specified events of bankruptcy, insolvency or reorganization or similar events. If an event of default occurs and is not cured within any applicable grace period or is not
waived, the lenders under the Credit Facilities would have the right to accelerate repayment of the indebtedness and other obligations owing under the Credit Agreement and the guaranty executed by the subsidiary guarantors in favor of the lenders,
and foreclose on certain pledged collateral, to the extent permitted under the loan documents and applicable law.
Item 8.01 Other Events
On November 5, 2015, the Company also announced that its Board of Directors has authorized an increase in its share repurchase program of up to an
additional $100 million of the Companys outstanding common stock, bringing the total amount authorized to be spent under the program to $550 million since its inception. Through September 30, 2015, the Company had repurchased
approximately 17,435,688 shares of its common stock at a total cost of approximately $432 million. Repurchases will continue to be made from time to time in the open market or in private transactions. The repurchase program does not obligate the
Company to repurchase any specific number of shares and may be modified or discontinued at any time.
Item 9.01 Financial Statements and Exhibits
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Exhibit
No. |
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Exhibit |
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10.1 |
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Amendment No. 2, dated as of October 30, 2015, to that certain Credit Agreement, dated as of February 6, 2015, among The Advisory Board Company, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative
Agent, and the other parties thereto. |
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99.1 |
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News release of The Advisory Board Company dated November 5, 2015. |
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SIGNATURE
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.
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The Advisory Board Company |
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Date: November 5, 2015 |
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/s/ Michael T. Kirshbaum |
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Michael T. Kirshbaum |
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Chief Financial Officer (Duly Authorized
Officer) |
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EXHIBIT INDEX
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Exhibit
No. |
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Description of Exhibit |
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10.1 |
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Amendment No. 2, dated as of October 30, 2015, to that certain Credit Agreement, dated as of February 6, 2015, among The Advisory Board Company, the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and
the other parties thereto. |
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99.1 |
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News release of The Advisory Board Company dated November 5, 2015. |
Exhibit 10.1
EXECUTION VERSION
AMENDMENT NO.
2, dated as of October 30, 2015 (this Amendment No. 2), to the Credit Agreement, dated as of February 6, 2015 and as amended by Amendment No. 1 thereto dated as of March 31, 2015 (the Credit
Agreement), among THE ADVISORY BOARD COMPANY, a Delaware corporation (the Borrower), JPMORGAN CHASE BANK, N.A., as administrative agent (the Administrative Agent), each Lender from time to time party
thereto and the other agents and arrangers party thereto. Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement.
WHEREAS, Section 9.02(b) of the Credit Agreement provides that the Credit Agreement may be amended or waived to effect certain changes
thereto with the written consent of the Administrative Agent and the Required Lenders and, with respect to certain changes, all Lenders or all Issuing Banks;
WHEREAS, the Borrower desires to amend, and the Borrower has requested that the Lenders, the Issuing Banks and the Administrative Agent agree
to amend, the Credit Agreement on the terms set forth herein (collectively, the Amendments);
WHEREAS, in connection
with the Amendments, the Borrower desires to increase the Aggregate Revolving Commitment to $200,000,000 and increase the aggregate amount of the Letter of Credit Sublimits to $25,000,000;
WHEREAS, substantially concurrently with the Amendments on the Amendment No. 2 Effective Date, the Borrower desires to
(i) voluntarily prepay a portion of the Term Loans of certain Lenders in an aggregate amount equal to $100,000,000 and effect assignments of a portion of the Term Loans of certain of the Lenders to certain other Lenders such that on the
Amendment No. 2 Effective Date after giving effect to such prepayments and assignments each Lenders Term Loans shall be as set forth beside such Lenders name on Annex A hereto and (ii) effect assignments of a portion of the new
Revolving Commitments of certain of the Lenders to certain other Lenders such that on the Amendment No. 2 Effective Date after giving effect to such assignments each Lenders Revolving Commitments shall be as set forth beside such
Lenders name on Annex B hereto, and the Borrower has requested that the Lenders consent to the voluntary prepayment of Term Loans set forth in clause (i) above and to the assignments of their Term Loans and Revolving Commitments, to the
extent applicable, set forth in clauses (i) and (ii) (collectively, the Prepayments Consent);
WHEREAS, the
Lenders signatory hereto, constituting all of the Lenders, each Issuing Bank and the Administrative Agent are willing to agree to the Amendments and the Prepayments Consent described herein, subject to the terms and conditions contained herein;
WHEREAS, the Lenders have agreed that, upon the Amendment No. 2 Effective Date, after giving effect to the prepayment and assignments of
Term Loans described above, the Term Loans shall be as set forth on Annex A hereto and each Lenders Term Loans, if any, shall be as set forth opposite such Lenders name on Annex A hereto and after giving effect to the increase in the
Aggregate Revolving Commitments and the assignments of new Revolving Commitments described above, the Revolving Commitments shall be as set forth on Annex B hereto and each Lenders Revolving Commitment, if any, shall be as set forth opposite
such Lenders name on Annex B hereto;
WHEREAS, the Issuing Banks signatory hereto have agreed that, upon the Amendment No. 2
Effective Date, the Letter of Credit Sublimits shall be as set forth on Annex C hereto and each such Issuing Banks Letter of Credit Sublimit shall be as set forth opposite such Issuing Banks name on Annex C hereto; and
WHEREAS, J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated are acting as joint lead arrangers in
connection with this Amendment No. 2 (collectively, the Amendment No. 2 Joint Lead Arrangers);
NOW,
THEREFORE, in consideration of the premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
Section 1. Amendments. Subject to the satisfaction of the conditions set forth in Section 4 hereof, upon the
Amendment No. 2 Effective Date, the Lenders party hereto consent to the following amendments to the Credit Agreement:
(a) The
definition of Aggregate Revolving Commitment in Section 1.01 of the Credit Agreement is hereby amended by restating the second sentence thereof in its entirety as follows:
As of the Amendment No. 2 Effective Date, the Aggregate Revolving Commitment is $200,000,000.
(b) The definition of Applicable Rate in Section 1.01 of the Credit Agreement is hereby amended by restating the table
contained therein in its entirety as follows:
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Total Leverage Ratio |
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Eurocurrency Spread |
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ABR Spread |
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Commitment Fee Rate |
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Category 1: |
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£ 1.25 to 1.00 |
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1.50 |
% |
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0.50 |
% |
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0.20 |
% |
Category 2: |
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> 1.25 to 1.00 but £ 2.25 to 1.00 |
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1.75 |
% |
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0.75 |
% |
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0.225 |
% |
Category 3: |
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> 2.25 to 1.00 but £ 3.25 to 1.00 |
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2.00 |
% |
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1.00 |
% |
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0.25 |
% |
Category 4: |
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> 3.25 to 1.00 |
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2.25 |
% |
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1.25 |
% |
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0.30 |
% |
(c) The definition of Joint Lead Arranger in Section 1.01 of the Credit Agreement is hereby
amended by inserting the following phrase at the end thereof: and the Amendment No. 2 Joint Lead Arrangers.
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(d) Section 1.01 of the Credit Agreement is hereby amended by inserting the following
defined terms in appropriate alphabetical order therein:
Amendment No. 2 Effective Date means October 30,
2015, the date on which Amendment No. 2 to this Agreement became effective.
Amendment No. 2 Joint Lead
Arrangers means J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Lead Arrangers with respect to Amendment No. 2 to this Agreement.
(e) Section 2.05(a) of the Credit Agreement is hereby amended by deleting the phrase Subject to adjustment pursuant to paragraph
(c) of this Section 2.05, contained therein.
(f) Section 2.06(b) of the Credit Agreement is hereby amended by
replacing the phrase $10,000,000 contained therein with the phrase $25,000,000.
(g) Section 6.04(r) of the
Credit Agreement is hereby amended by replacing the phrase $75,000,000 contained therein with the phrase $125,000,000.
(h) Section 6.07(i) of the Credit Agreement is hereby amended by replacing the phrase $75,000,000 contained therein with the
phrase $125,000,000.
(i) Section 6.09(a)(v) of the Credit Agreement is hereby amended by replacing the phrase
$75,000,000 contained therein with the phrase $125,000,000.
(j) Schedule 2.01(a) of the Credit Agreement is
hereby amended by amending and restating the table contained therein under the heading Revolving Commitment in its entirety as set forth on Annex B hereto. Each Lender party hereto agrees that, upon the Amendment No. 2 Effective
Date, the Revolving Commitments shall be as set forth on Annex B hereto and each such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B hereto. Any Revolving Loans outstanding under the
Credit Agreement immediately prior to the Amendment No. 2 Effective Date shall be repaid with a substantially concurrent Borrowing of Revolving Loans immediately following the Amendment No. 2 Effective Date.
(k) Schedule 2.01(b) of the Credit Agreement is hereby amended and restated in its entirety as set forth on Annex C hereto. Each Issuing Bank
agrees that, upon the Amendment No. 2 Effective Date, the Letter of Credit Sublimits shall be as set forth on Annex C hereto and each such Issuing Banks Letter of Credit Sublimit shall be as set forth opposite such Issuing Banks
name on Annex C hereto.
Section 2. Prepayments Consent. Subject to the satisfaction of the conditions set forth in
Section 4 hereof, upon the Amendment No. 2 Effective Date, the Lenders party hereto consent, without the delivery of any other prepayment notice, to the voluntary prepayment by the Borrower of the Term Loans of each applicable Lender in an
aggregate amount equal to
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$100,000,000, such that, after giving effect to such prepayments and the assignments referred to in the next succeeding sentence, the Term Loans of each Lender shall be as is set forth beside
such Lenders name on Annex A hereto, all on a non-pro rata basis. Subject to the satisfaction of the conditions set forth in Section 4 hereof, upon the Amendment No. 2 Effective Date, each Lender agrees that, without the delivery of
any other assignment documentation, (i) each Lender with a greater amount of Term Loans set forth beside its name on Annex A hereto than it has outstanding immediately prior to the Amendment No. 2 Effective Date shall purchase by
assignment an amount of Term Loans as directed by the Administrative Agent and (ii) each Lender with a lesser amount of Term Loans set forth beside its name on Annex A hereto than it has outstanding immediately prior to the Amendment No. 2
Effective Date shall sell by assignment an amount of Term Loans as directed by the Administrative Agent, in the case of each of clauses (i) and (ii) such that each Lenders Term Loans on the Amendment No. 2 Effective Date shall
be as set forth beside such Lenders name on Annex A hereto. Upon the Amendment No. 2 Effective Date, each Lender agrees that, without the delivery of any other assignment documentation, each Lender with a lesser amount of Revolving
Commitments set forth beside its name on Annex B hereto than it has outstanding immediately prior to the Amendment No. 2 Effective Date shall be deemed to have sold by assignment an amount of Revolving Commitments as directed by the
Administrative Agent to one or more of the Lenders with a greater amount of Revolving Commitments set forth beside its name on Annex B hereto than it has outstanding immediately prior to the Amendment No. 2 Effective Date, such that after
giving effect to the increase in the Aggregate Revolving Commitments and any deemed assignments, each Lenders Revolving Commitments on the Amendment No. 2 Effective Date shall be as set forth beside such Lenders name on Annex B
hereto. Each Lender party hereto understands and agrees that such voluntary prepayments of Term Loans to occur on the Amendment No. 2 Effective Date shall not increase the Incremental Cap. Each of the Lenders party hereto hereby waives
(x) any compensation pursuant to Section 2.16 of the Credit Agreement with respect to breakage costs or any other similar loss, cost or expense in connection with the prepayments of Eurocurrency Loans to occur on the Amendment No. 2
Effective Date, and (y) any right pursuant to Section 2.18(d) of the Credit Agreement to share ratably in the prepayments contemplated by this Section 2.
Section 3. Representations and Warranties. The Borrower represents and warrants to the Administrative Agent and each of the
Lenders that:
(a) The execution and delivery of this Amendment No. 2 is within the Borrowers organizational powers and has
been duly authorized by all necessary organizational action on the part of the Borrower. This Amendment No. 2 has been duly executed and delivered by the Borrower and constitutes, a legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency or similar laws affecting creditors rights generally, subject to general principles of equity and subject to implied covenants of good faith and fair
dealing. This Amendment No. 2 will not (i) violate any Requirement of Law in any material respect, (ii) violate the articles of incorporation, bylaws or similar organizational documents of any Loan Party or (iii) violate or
result in a default or require any consent or approval under any indenture, agreement or other instrument binding upon any Loan Party or its property, or give rise to a right thereunder to require any payment to be made by any Loan Party, except, in
the case of this clause (iii), for violations, defaults or the creation of such rights that would not reasonably be expected to result in a Material Adverse Effect.
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(b) Immediately prior to and immediately after giving effect to this Amendment No. 2, the
representations and warranties set forth in Article III of the Credit Agreement and in any other Loan Document are true and correct in all material respects (except where such representations and warranties expressly relate to an earlier date, in
which case such representations and warranties shall have been true and correct in all material respects as of such earlier date); provided that any representation and warranty that is qualified as to materiality, material
adverse effect or similar language shall be true and correct in all respects (after giving effect to any such qualification therein).
(c) Immediately prior to and immediately after giving effect to this Amendment No. 2, no Default or Event of Default has occurred and is
continuing.
Section 4. Conditions to Effectiveness. This Amendment No. 2 shall become effective as of the first
date (the Amendment No. 2 Effective Date) on which the following conditions have been satisfied:
(a) the
Administrative Agent (or its counsel) shall have received from all of the Lenders, all of the Issuing Banks and the Borrower either (i) a counterpart of this Amendment No. 2 signed on behalf of such Person or (ii) written evidence
satisfactory to the Administrative Agent (which may include facsimile or .pdf transmission of a signed signature page of this Amendment No. 2) that such Person has signed a counterpart of this Amendment No. 2;
(b) the representations and warranties set forth in Section 3 hereof shall be true and correct as of the Amendment No. 2
Effective Date;
(c) the Borrower shall deliver or cause to be delivered a legal opinion with respect to this Amendment No. 2 of
Hogan Lovells US LLP, as counsel to the Borrower, dated the Amendment No. 2 Effective Date;
(d) the Administrative Agent shall have
received a certificate, dated the Amendment No. 2 Effective Date and signed by the President, a Vice President or a Financial Officer of the Borrower, confirming compliance with the condition precedent set forth in clause (b) of this
Section 4;
(e) the Company shall have paid (i) for the account of each Lender party hereto, a consent fee equal to 0.02%
of the aggregate principal amount of such Lenders Term Loans and Revolving Commitments immediately prior to the Amendment No. 2 Effective Date and (ii) for the account of each Revolving Lender that has a greater amount of Revolving
Commitments upon the Amendment No. 2 Effective Date than it did immediately prior to the Amendment No. 2 Effective Date, an upfront fee equal to the product of (a) 0.30% and (b) the Revolving Commitments of such Lender as of the
Amendment No. 2 Effective Date, less (x) the Revolving Commitments of such Lender outstanding immediately prior to the Amendment No. 2 Effective Date, less (y) an amount (which shall not be less than zero) equal to (i) the
aggregate
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principal amount of Term Loans of such Lender outstanding immediately prior to the Amendment No. 2 Effective Date less (ii) the aggregate principal amount of Term Loans of such Lender
outstanding on the Amendment No. 2 Effective Date;
(f) the Company shall have paid all reasonable out of pocket costs and expenses
of the Administrative Agent and the Amendment No. 2 Joint Lead Arrangers in connection with the preparation, negotiation and execution of this Amendment No. 2 (including the reasonable fees and expenses of Cahill Gordon & Reindel
LLP as counsel to the Administrative Agent and the Amendment No. 2 Joint Lead Arrangers); and
(g) substantially
concurrently with the Amendment No. 2 Effective Date, the Borrower shall have prepaid such portion of the Term Loans of each Lender in an aggregate principal amount of $100,000,000, such that after giving effect to such prepayment and the
assignments to occur on the Amendment No. 2 Effective Date, each Lenders Term Loans shall be as set forth beside such Lenders name on Annex A hereto, together with any accrued and unpaid interest and fees with respect thereto.
Section 5. Counterparts. This Amendment No. 2 may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all of which when taken together shall constitute a single instrument. Delivery of an executed counterpart of a signature
page of this Amendment No. 2 by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart hereof.
Section 6. Loan Document. This Amendment No. 2 shall constitute a Loan Document for all purposes under the Credit
Agreement.
Section 7. Applicable Law. THIS AMENDMENT NO. 2 SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 8. Headings. The headings of this Amendment
No. 2 are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.
Section 9. Effect of
Amendment. Except as expressly set forth herein, this Amendment No. 2 (i) shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders, the Administrative
Agent or the Issuing Banks, in each case under the Credit Agreement or any other Loan Document, and (ii) shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the
Credit Agreement or any other provision of either such agreement or any other Loan Document. Each and every term, condition, obligation, covenant and agreement contained in the Credit Agreement or any other Loan Document (for avoidance of doubt, in
each case, as altered, modified or amended as expressly set forth herein) is hereby ratified and reaffirmed in all respects and shall continue in full force and effect.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be duly executed
by their respective authorized officers as of the day and year first above written.
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THE ADVISORY BOARD COMPANY, as Borrower |
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By: |
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/s/ Michael Kirshbaum |
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Name: |
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Michael Kirshbaum |
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Title: |
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Chief Financial Officer and Treasurer |
[Amendment No. 2 Signature Page]
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JPMORGAN CHASE BANK, N.A., as
Administrative Agent |
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By: |
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/s/ James A. Knight |
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Name: |
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James A. Knight |
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Title: |
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Vice President |
[Amendment No. 2
Signature Page]
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JPMORGAN CHASE BANK, N.A., as
Issuing Bank |
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By: |
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/s/ James A. Knight |
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Name: |
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James A. Knight |
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Title: |
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Vice President |
[Amendment No. 2
Signature Page]
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Bank of America, N.A., as Issuing
Bank |
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By: |
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/s/ Monica Sevila |
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Name: |
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Monica Sevila |
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Title: |
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Senior Vice President |
[Amendment No. 2
Signature Page]
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MORGAN STANLEY BANK, N.A., as
Issuing Bank |
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By: |
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/s/ Michael King |
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Name: |
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Michael King |
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Title: |
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Authorized Signatory |
[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the prepayments and
assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving Commitments
shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
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JPMORGAN CHASE BANK, N.A., as a
Lender |
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By: |
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/s/ James A. Knight |
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Name: |
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James A. Knight |
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Title: |
|
Vice President |
[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the prepayments and
assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving Commitments
shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
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Bank of America, N.A., as a
Lender |
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By: |
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/s/ Monica Sevila |
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Name: |
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Monica Sevila |
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Title: |
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Senior Vice President |
[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the prepayments and
assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving Commitments
shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
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SunTrust Bank, as a
Lender |
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By: |
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/s/ Dave Bennett |
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Name: |
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Dave Bennett |
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Title: |
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Director |
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For any institution requiring a second signatory: |
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By: |
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Name: |
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Title: |
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[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the prepayments and
assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving Commitments
shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
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MUFG Union Bank, N.A., as a
Lender |
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By: |
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/s/ Michael Gardner |
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Name: |
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Michael Gardner |
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Title: |
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Director |
[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the prepayments and
assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving Commitments
shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
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Wells Fargo Bank, N.A., as a
Lender |
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By: |
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/s/ Frank S. Kaulback, III |
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Name: |
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Frank S. Kaulback, III |
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Title: |
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Senior Vice President |
[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the prepayments and
assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving Commitments
shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
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PNC BANK, NATIONAL ASSOCIATION, as
a Lender |
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By: |
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/s/ Steven Day |
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Name: |
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Steven Day |
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Title: |
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Assistant Vice President |
[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the prepayments and
assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving Commitments
shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
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REGIONS BANK, as a
Lender |
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By: |
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/s/ Bruce Rudolph |
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Name: |
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Bruce Rudolph |
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Title: |
|
Vice President |
[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the prepayments and
assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving Commitments
shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
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Citizens Bank, N.A, as a
Lender |
|
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By: |
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/s/ William McClassy |
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|
Name: |
|
William McClassy |
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|
Title: |
|
Sr. Vice President |
[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the prepayments and
assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving Commitments
shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
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HSBC Bank USA, N.A., as a
Lender |
|
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By: |
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/s/ John P Treadwell Jr. |
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|
Name: |
|
John P Treadwell Jr. |
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|
Title: |
|
Vice President |
RESTRICTED - [Amendment
No. 2 Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the prepayments and
assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving Commitments
shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
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HEALTHCARE FINANCIAL SOLUTIONS, LLC,
as a Lender |
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By: |
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/s/ Hanes Whiteley |
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Name: |
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Hanes Whiteley |
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Title: |
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Duly Authorized Signatory |
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|
For any institution requiring a second signatory: |
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By: |
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|
|
|
Name: |
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|
|
|
|
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|
|
|
Title: |
|
|
[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments/Terminations Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the
prepayments and assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving
Commitments shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
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Capital One, N.A., As a
Lender |
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By: |
|
/s/ Katherine A. Marcotte |
|
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|
|
Name: |
|
Katherine A. Marcotte |
|
|
Title: |
|
Senior Vice President |
[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the prepayments and
assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving Commitments
shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
|
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|
|
Barclays Bank PLC, as a
Lender |
|
|
By: |
|
/s/ Mathew Cybul |
|
|
Name: |
|
Mathew Cybul |
|
|
Title: |
|
Assistant Vice President |
[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the prepayments and
assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving Commitments
shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
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|
|
TD Bank, N.A., as a
Lender |
|
|
|
|
|
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|
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|
|
|
By: |
|
/s/ Mark Worthy |
|
|
|
|
|
|
|
|
Name: |
|
Mark Worthy |
|
|
|
|
|
|
|
|
Title: |
|
Vice President |
|
|
|
|
|
|
|
For any institution requiring a second signatory: |
|
|
|
By: |
|
|
|
|
|
|
|
|
|
|
Name: |
|
|
|
|
|
|
|
|
|
|
Title: |
|
|
[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the prepayments and
assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving Commitments
shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
|
|
|
|
|
RAYMOND JAMES BANK, N.A., as a
Lender |
|
|
By: |
|
/s/ Alexander L. Rody |
|
|
Name: |
|
Alexander L. Rody |
|
|
Title: |
|
Senior Vice President |
[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments/Terminations Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the
prepayments and assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving
Commitments shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2
|
|
|
|
|
Morgan Stanley Senior Funding, Inc.,
as a Lender |
|
|
By: |
|
/s/ Michael King |
|
|
|
|
|
Name: |
|
Michael King |
|
|
Title: |
|
Vice President |
[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments/Terminations Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the
prepayments and assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving
Commitments shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
|
|
|
|
|
Morgan Stanley Bank, N.A.,
as a Lender |
|
|
By: |
|
/s/ Michael King |
|
|
Name: |
|
Michael King |
|
|
Title: |
|
Authorized Signatory |
[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the prepayments and
assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving Commitments
shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
|
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|
|
|
|
|
|
United Bank as a Lender |
|
|
|
|
|
|
|
|
|
|
|
By: |
|
/s/ Tom Wolcott |
|
|
|
|
|
|
|
|
Tom Wolcott |
|
|
|
|
|
|
|
|
SVP Shared National Credit |
|
|
|
|
|
|
|
For any institution requiring a second signatory: |
|
|
|
By: |
|
|
|
|
|
|
|
|
|
|
Name: |
|
|
|
|
|
|
|
|
|
|
Title: |
|
|
[Amendment No. 2
Signature Page]
The undersigned hereby executes this Amendment No. 2 as a Lender and (i) consents to the Amendments and
the Prepayments Consent, (ii) agrees that, upon the Amendment No. 2 Effective Date, the Term Loans shall be as set forth on Annex A to Amendment No. 2 and such Lenders Term Loans (after giving effect to the prepayments and
assignments described in Amendment No. 2), if any, shall be as set forth opposite such Lenders name on Annex A to Amendment No. 2 and (iii) agrees that, upon the Amendment No. 2 Effective Date, the Revolving Commitments
shall be as set forth on Annex B to Amendment No. 2 and such Lenders Revolving Commitment, if any, shall be as set forth opposite such Lenders name on Annex B to Amendment No. 2:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender |
|
|
|
|
|
|
|
|
|
|
|
By: |
|
/s/ Hanes Whiteley |
|
|
|
|
|
|
|
|
Name: |
|
Hanes Whiteley |
|
|
|
|
|
|
|
|
Title: |
|
Duly Authorized Signatory |
|
|
|
|
|
|
|
For any institution requiring a second signatory: |
|
|
|
By: |
|
|
|
|
|
|
|
|
|
|
Name: |
|
|
|
|
|
|
|
|
|
|
Title: |
|
|
[Amendment No. 2
Signature Page]
Annex A
Term Loans
|
|
|
|
|
Lender |
|
Term Loans |
|
JPMorgan Chase Bank, N.A. |
|
$ |
51,180,555.64 |
|
Bank of America, N.A. |
|
$ |
51,180,555.56 |
|
SunTrust Bank |
|
$ |
40,944,444.44 |
|
MUFG Union Bank, N.A. |
|
$ |
34,120,370.36 |
|
Wells Fargo Bank, N.A. |
|
$ |
34,120,370.36 |
|
PNC Bank, National Association |
|
$ |
34,120,370.36 |
|
Regions Bank |
|
$ |
34,120,370.36 |
|
Citizens Bank, N.A. |
|
$ |
34,120,370.36 |
|
HSBC Bank USA, N.A. |
|
$ |
23,884,259.25 |
|
Healthcare Financial Solutions, LLC |
|
$ |
23,884,259.25 |
|
Capital One, N.A. |
|
$ |
23,884,259.25 |
|
Barclays Bank PLC |
|
$ |
23,884,259.25 |
|
TD Bank, N.A. |
|
$ |
21,065,619.98 |
|
Raymond James Bank, N.A. |
|
$ |
20,027,173.91 |
|
Morgan Stanley Senior Funding, Inc. |
|
$ |
6,082,326.89 |
|
United Bank |
|
$ |
4,005,434.78 |
|
|
|
|
|
|
Total |
|
$ |
460,625,000.00 |
|
|
|
|
|
|
Annex B
Revolving Commitment
|
|
|
|
|
Revolving Lender |
|
Revolving Commitment |
|
JPMorgan Chase Bank, N.A. |
|
$ |
22,222,222.22 |
|
Bank of America, N.A. |
|
$ |
22,222,222.21 |
|
MUFG Union Bank, N.A. |
|
$ |
20,032,206.12 |
|
SunTrust Bank |
|
$ |
17,777,777.78 |
|
Wells Fargo Bank, N.A. |
|
$ |
14,814,814.82 |
|
PNC Bank, National Association |
|
$ |
14,814,814.82 |
|
Regions Bank |
|
$ |
14,814,814.82 |
|
Citizens Bank, N.A. |
|
$ |
14,814,814.82 |
|
HSBC Bank USA, N.A. |
|
$ |
10,370,370.37 |
|
Healthcare Financial Solutions, LLC |
|
$ |
10,370,370.37 |
|
Capital One, N.A. |
|
$ |
10,370,370.37 |
|
Barclays Bank PLC |
|
$ |
10,370,370.37 |
|
Morgan Stanley Bank, N.A. |
|
$ |
8,727,858.29 |
|
TD Bank, N.A. |
|
$ |
8,276,972.62 |
|
General Electric Capital Corporation |
|
$ |
0.00 |
|
|
|
|
|
|
Total |
|
$ |
200,000,000.00 |
|
|
|
|
|
|
Annex C
Schedule 2.01(b) LETTER OF CREDIT SUBLIMITS
|
|
|
|
|
L/C Issuer |
|
Letter of Credit Sublimit |
|
JPMorgan Chase Bank, N.A. |
|
$ |
12,500,000 |
|
Bank of America, N.A. |
|
$ |
7,500,000 |
|
Morgan Stanley Bank, N.A. |
|
$ |
5,000,000 |
|
Exhibit 99.1
|
|
|
|
|
Contact: |
|
Michael Kirshbaum |
|
The Advisory Board Company |
|
|
Chief Financial Officer |
|
2445 M Street, N.W. |
|
|
c/o Bianca Alonso |
|
Washington, D.C. 20037 |
|
|
202.266.5803 |
|
www.advisory.com |
|
|
IR@advisory.com |
|
|
THE ADVISORY BOARD COMPANY REPORTS RESULTS FOR
QUARTER ENDED SEPTEMBER 30, 2015
Company Reports Revenue Growth of 39%, Contract Value Growth of 35%, and Announces $100M Increase to Share Repurchase Program
WASHINGTON, D.C. (November 5, 2015) The Advisory Board Company (NASDAQ: ABCO), a global technology, research, and services
company providing the leading cloud-based comprehensive performance platform for the health care and higher education industries, today announced financial results for the quarter ended September 30, 2015.
Highlights from the third quarter of 2015 are as follows (all comparisons, unless otherwise noted, are to the quarter ended September 30, 2014):
|
|
|
Revenue of $200.2 million, an increase of 39% |
|
|
|
Contract value of $760.3 million, an increase of 35% |
|
|
|
Adjusted EBITDA of $43.4 million, an increase of 71% |
|
|
|
Non-GAAP earnings per diluted share of $0.33 |
Robert Musslewhite, Chairman and Chief Executive Officer of The
Advisory Board Company, commented, We are pleased with our performance for the quarter and the value we are delivering to our members as they face ongoing change and complexity in their markets. Our results reflect the powerful attributes of
our business very clearly, with the combination of rapid top line growth along with even faster EBITDA growth, expanding margins, and solid cash generation. A keen focus on execution across the quarter allowed us to produce excellent operating
outcomes, and we are well on pace to end the year with momentum and deliver key financial metrics within the guidance range we provided back in February.
Mr. Musslewhite continued, Across these final two months of the year we are heavily focused on continuing to drive outstanding member impact
and flawless execution in order to finish the important December quarter strong and to put ourselves in the best possible position for 2016 and beyond.
Third Quarter Financial Review
Revenue increased 39% to
$200.2 million in the quarter ended September 30, 2015, up from $144.2 million for the quarter ended September 30, 2014. Contract value increased 35% to $760.3 million as of September 30, 2015, up from $561.6 million as of
September 30, 2014.
Net income attributable to common stockholders was $1.9 million, or $0.04 per diluted share, for the quarter
ended September 30, 2015, compared to net income attributable to common stockholders of $6.5 million, or $0.18 per diluted share, for the quarter ended September 30, 2014. Adjusted net income was $14.1 million for the quarter ended
September 30, 2015, compared to $15.9 million for the quarter ended September 30, 2014. Non-GAAP earnings per diluted share was $0.33 for the quarter ended September 30, 2015, compared to $0.43 for the quarter ended September 30,
2014.
Adjusted EBITDA increased 71% to $43.4 million for the quarter ended September 30, 2015, up from $25.4 million for the quarter ended
September 30, 2014.
Adjusted revenue, adjusted net income, non-GAAP earnings per diluted share, and adjusted EBITDA are non-GAAP financial measures.
Year-to-Date Financial Review
Revenue increased 33%
to $564.7 million for the nine month period ended September 30, 2015, up from $424.0 million for the nine month period ended September 30, 2014. Adjusted revenue, which adjusts for the effect on revenue of fair value adjustments to
acquired deferred revenue, increased 36% to $577.2 million for the nine month period ended September 30, 2015, up from $424.0 million for the nine month period ended September 30, 2014. Net loss attributable to common stockholders was
$13.1 million, or $0.31 per diluted share, for the nine month period ended September 30, 2015, compared to net income attributable to common stockholders of $11.6 million, or $0.31 per diluted share, for the nine month period ended
September 30, 2014. Adjusted EBITDA was $129.9 million for the nine month period ended September 30, 2015, up from $75.4 million for the nine month period ended September 30, 2014. Adjusted net income was $44.3 million for the nine
month period ended September 30, 2015, up from $39.5 million for the nine month period ended September 30, 2014. Non-GAAP earnings per diluted share was $1.04 for the nine month period ended September 30, 2015, compared to $1.07 for
the nine month period ended September 30, 2014.
Share Repurchase Authorization Increased by $100 Million
During the three months ended September 30, 2015, the Company repurchased approximately 678,000 shares of its common stock at a total cost of $33.0
million. Since 2004, the Company has repurchased approximately 17.4 million shares of its common stock at a total cost of $431.8 million.
The
Company also announced that its Board of Directors authorized an increase in its share repurchase program of up to an additional $100 million of the Companys common stock, bringing the total amount authorized to be spent under the program to
$550 million. Repurchases will continue to be made from time to time in the open market or in private transactions. The repurchase program does not obligate the Company to repurchase any specific number of shares and may be modified or discontinued
at any time. The Company will fund its share repurchases with cash on hand and cash generated from operations.
Outlook for Calendar Year 2015
The Company is reaffirming its annual financial guidance. For calendar year 2015, the Company continues to expect:
|
|
|
Adjusted revenue to be in a range of approximately $780 million to $790 million |
|
|
|
Adjusted EBITDA to be in a range of approximately $170 million to $175 million |
|
|
|
Non-GAAP earnings per diluted share to be in a range of approximately $1.30 to $1.37 |
|
|
|
Adjusted effective tax rate to be in a range of approximately 45% to 47% |
Conference Call Information
As previously announced, the Company will hold a conference call to discuss its third quarter performance this evening, November 5, 2015, at 5:30
p.m. Eastern Time. The conference call will be available via live webcast on the Companys website at www.advisory.com/IR. To participate by telephone, the dial-in number is 888.336.7150.
Participants are advised to dial in at least five minutes prior to the call to register. The webcast will be archived for seven days from 8:00 p.m. Eastern Time on Thursday, November 5,
2015, until 11:00 p.m. Eastern Time on Thursday, November 12, 2015. The Company invites all interested parties to attend the conference call, including the lenders under the Companys senior secured credit facilities.
A supplemental presentation of information complementary to the information presented in this release and that will be discussed on the conference call will
be made available on the Companys website at www.advisory.com/IR prior to the conference call and will be archived for the same duration as the webcast.
About the Advisory Board Company
The Advisory Board
Company is the leading provider of insight-driven technology, research, and services for organizations in transforming industries. Through its innovative membership model, the Company collaborates with more than 230,000 leaders
at 5,200 member organizations to elevate performance and solve their most pressing problems. The Company provides strategic guidance, actionable insights, cloud-based software solutions, and comprehensive implementation and management services. For
more information, visit www.advisory.com.
Non-GAAP Financial Measures
This news release presents information about the Companys adjusted revenue, adjusted net income, non-GAAP earnings per diluted share, adjusted EBITDA,
adjusted effective tax rate, and adjusted weighted average common shares outstanding-diluted, 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). A reconciliation of each of the foregoing historical non-GAAP financial measures to the most directly comparable historical GAAP financial measures is provided in the accompanying tables found at the end
of this release for each of the fiscal periods indicated.
Caution Regarding Forward-Looking Statements
Statements in this news release that relate to future results and events are forward-looking statements and are based on the Companys expectations as of
the date of this news release. In some cases, you can identify these statements by such forward-looking words as anticipate, believe, estimate, expect, guidance, intend,
may, outlook, plan, potential, should, will, would, or similar words or expressions. Forward-looking statements in this news release include the Companys
expectations regarding its performance and results for fiscal 2015 with respect to adjusted revenue, adjusted EBITDA, non-GAAP earnings per diluted share, and adjusted effective tax rate.
Actual results and events in future periods may differ materially from those expressed or implied by these forward-looking statements because of a number of
risks, uncertainties, and other factors, including those relating to: factors that adversely affect the financial condition of the health care and higher education industries; federal and state law and regulations governing the health care and
higher education industries and our members and our respective compliance with those applicable laws and regulations; the Companys ability to sustain high renewal rates on its memberships; maintenance of the Companys reputation and
expansion of its name recognition; the Companys ability to offer new and valuable products and services; effects of competition; the Companys ability to maintain a highly-skilled workforce; unsuccessful design or implementation of
software or delivery of consulting and management services; delays in generating revenue; effects of federal and state privacy and security laws and cyber attacks and other data security breaches; compliance with federal regulations governing
electronic transactions; service disruptions and operational or security failures; ability to collect and maintain member and third party data and to obtain proper permissions and waivers for use and disclosure of information received from members
or on their behalf; liability for failure to provide accurate information or for deficient submissions to third-party payors; compliance with federal and state laws governing healthcare fraud and abuse or reimbursement; maintenance of third-party
providers and strategic alliances and entry into new alliances; licensing and integration of third-party technologies and data; protection of the Companys intellectual property; claims of infringement, misappropriation, or violation of
proprietary rights of third parties; limitations associated with use of open source technology; changes to estimates and assumptions used to prepare the Companys consolidated financial statements; any significant increase in bad debt in excess
of recorded estimates; failure to realize the anticipated
benefits of the Royall acquisition; diversion of managements attention from operations by activities focused on the integration of Royalls business; business and financial risk
associated with the pursuit of acquisition opportunities; delays in the delivery by Evolent Health to the Company of its financial statements; any significant impairment of the Companys goodwill; the Companys ability to realize a return
on its strategic investments; the level of the Companys debt service obligations and restrictions on its operations under debt covenants; potential imposition of sales and use taxes on sales of the Companys services; the Companys
ability to realize fully its deferred tax assets; inherent limitations in, and the potential impact of any failure to maintain, effective internal control over financial reporting; effects of issuance of additional capital stock; and provisions in
the Companys charter and bylaws that could discourage takeover attempts.
This list of risks, uncertainties, and other factors is not complete. The
Company discusses some of these matters more fully, as well as certain risk factors that could affect the Companys business, financial condition, results of operations, and prospects, in its filings with the Securities and Exchange Commission,
including the Companys annual report on form 10-KT for the transition period ended December 31, 2014 and its quarterly reports on Form 10-Q and current reports on Form 8-K. These filings are available for review through the Securities and
Exchange Commissions website at www.sec.gov. Any or all forward-looking statements the Company makes may turn out to be wrong, and can be affected by inaccurate assumptions the Company might make or by known or unknown risks, uncertainties,
and other factors, including those identified in this news release. Accordingly, you should not place undue reliance on the forward-looking statements made in this news release, which speak only as of its date. The Company does not undertake to
update any of its forward-looking statements, whether as a result of circumstances or events that arise after the date they are made, new information, or otherwise.
###
Reconciliation of Non-GAAP
Financial Measures
This news release presents information about the Companys adjusted revenue, adjusted EBITDA, adjusted net income, non-GAAP
earnings per diluted share, adjusted effective tax rate, and adjusted weighted average common shares outstanding-diluted, which are non-GAAP financial measures provided as a complement to the results provided in accordance with GAAP.
A reconciliation of each of the foregoing historical non-GAAP financial measures to the most directly comparable historical GAAP financial measures is
provided below for each of the fiscal periods indicated. It is not practicable to provide a reconciliation of forecasted adjusted revenue, adjusted EBITDA, adjusted net income, non-GAAP earnings per diluted share, or adjusted effective tax rate to
the most directly comparable GAAP financial measures because certain items required for the forecast of such GAAP financial measures, including fair value adjustments to acquisition-related earn-out liabilities, equity in income (loss) of
unconsolidated entity, and gains and losses on investment in common stock warrants, cannot reasonably be estimated or predicted at this time.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
Revenue |
|
$ |
200,238 |
|
|
$ |
144,220 |
|
|
$ |
564,694 |
|
|
$ |
424,041 |
|
Effect on revenue of fair value adjustments to acquisition-related deferred revenue |
|
|
|
|
|
|
|
|
|
|
12,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted revenue |
|
$ |
200,238 |
|
|
$ |
144,220 |
|
|
$ |
577,193 |
|
|
$ |
424,041 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
Net income (loss) attributable to common stockholders |
|
$ |
1,856 |
|
|
$ |
6,490 |
|
|
$ |
(13,117 |
) |
|
$ |
11,600 |
|
Effect on revenue of fair value adjustments to acquisition-related deferred revenue |
|
|
|
|
|
|
|
|
|
|
12,499 |
|
|
|
|
|
Equity in loss of unconsolidated entities |
|
|
3,289 |
|
|
|
1,197 |
|
|
|
1,668 |
|
|
|
6,078 |
|
Accretion of noncontrolling interest to redemption value |
|
|
|
|
|
|
(150 |
) |
|
|
|
|
|
|
6,890 |
|
Provision for income taxes |
|
|
7,156 |
|
|
|
710 |
|
|
|
12,066 |
|
|
|
11,540 |
|
Interest expense |
|
|
5,450 |
|
|
|
|
|
|
|
16,333 |
|
|
|
|
|
Other expense (income), net |
|
|
1,150 |
|
|
|
851 |
|
|
|
2,280 |
|
|
|
(591 |
) |
Loss on financing activities |
|
|
|
|
|
|
|
|
|
|
17,398 |
|
|
|
|
|
Depreciation and amortization |
|
|
18,494 |
|
|
|
9,679 |
|
|
|
55,067 |
|
|
|
27,225 |
|
Acquisition and similar transaction charges |
|
|
|
|
|
|
|
|
|
|
6,610 |
|
|
|
268 |
|
Fair value adjustments to acquisition-related earn-out liabilities |
|
|
(1,057 |
) |
|
|
(400 |
) |
|
|
(2,140 |
) |
|
|
(4,600 |
) |
Vacation accrual adjustment |
|
|
|
|
|
|
850 |
|
|
|
(850 |
) |
|
|
850 |
|
Stock-based compensation expense |
|
|
7,094 |
|
|
|
6,175 |
|
|
|
22,130 |
|
|
|
16,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
43,432 |
|
|
$ |
25,402 |
|
|
$ |
129,944 |
|
|
$ |
75,399 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
Net income (loss) attributable to common stockholders |
|
$ |
1,856 |
|
|
$ |
6,490 |
|
|
$ |
(13,117 |
) |
|
$ |
11,600 |
|
Effect of adjusted tax rate on net (loss) income |
|
|
1,510 |
|
|
|
|
|
|
|
11,640 |
|
|
|
|
|
Effect on revenue of fair value adjustments to acquisition-related deferred revenue, net of adjusted tax rate |
|
|
|
|
|
|
|
|
|
|
7,047 |
|
|
|
|
|
Equity in loss of unconsolidated entities |
|
|
3,289 |
|
|
|
1,197 |
|
|
|
1,668 |
|
|
|
6,078 |
|
Accretion of noncontrolling interest to redemption value |
|
|
|
|
|
|
(150 |
) |
|
|
|
|
|
|
6,890 |
|
Amortization of acquisition-related intangibles, net of adjusted tax rate |
|
|
4,188 |
|
|
|
2,261 |
|
|
|
12,970 |
|
|
|
5,144 |
|
Loss on financing activities, net of adjusted tax rate |
|
|
|
|
|
|
|
|
|
|
9,725 |
|
|
|
|
|
Acquisition and similar transaction charges, net of adjusted tax rate |
|
|
|
|
|
|
|
|
|
|
3,704 |
|
|
|
162 |
|
Fair value adjustments to acquisition-related earn-out liabilities, net of adjusted tax rate |
|
|
(572 |
) |
|
|
(366 |
) |
|
|
(1,191 |
) |
|
|
(2,949 |
) |
(Gain) loss on investment in common stock warrants, net of adjusted tax rate |
|
|
|
|
|
|
|
|
|
|
(40 |
) |
|
|
108 |
|
Vacation accrual adjustment, net of adjusted tax rate |
|
|
|
|
|
|
777 |
|
|
|
(475 |
) |
|
|
777 |
|
Stock-based compensation expense, net of adjusted tax rate |
|
|
3,838 |
|
|
|
5,643 |
|
|
|
12,320 |
|
|
|
11,714 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income |
|
$ |
14,109 |
|
|
$ |
15,852 |
|
|
$ |
44,251 |
|
|
$ |
39,524 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
Net income (loss) attributable to common shareholders per share - Diluted |
|
$ |
0.04 |
|
|
$ |
0.18 |
|
|
$ |
(0.31 |
) |
|
$ |
0.31 |
|
Effect of adjusted tax rate on net (loss) income |
|
|
0.04 |
|
|
|
|
|
|
|
0.27 |
|
|
|
|
|
Effect on revenue of fair value adjustments to acquisition-related deferred revenue, net of adjusted tax rate |
|
|
|
|
|
|
|
|
|
|
0.16 |
|
|
|
|
|
Equity in loss of unconsolidated entities |
|
|
0.08 |
|
|
|
0.03 |
|
|
|
0.04 |
|
|
|
0.16 |
|
Accretion of noncontrolling interest to redemption value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.19 |
|
Amortization of acquisition-related intangibles, net of adjusted tax rate |
|
|
0.10 |
|
|
|
0.06 |
|
|
|
0.31 |
|
|
|
0.15 |
|
Loss on financing activities, net of adjusted tax rate |
|
|
|
|
|
|
|
|
|
|
0.23 |
|
|
|
|
|
Acquisition and similar transaction charges, net of adjusted tax rate |
|
|
|
|
|
|
|
|
|
|
0.09 |
|
|
|
|
|
Fair value adjustments to acquisition-related earn-out liabilities, net of adjusted tax rate |
|
|
(0.02 |
) |
|
|
(0.01 |
) |
|
|
(0.03 |
) |
|
|
(0.08 |
) |
Gain (loss) on investment in common stock warrants, net of adjusted tax rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vacation accrual adjustment, net of adjusted tax rate |
|
|
|
|
|
|
0.02 |
|
|
|
(0.01 |
) |
|
|
0.02 |
|
Stock-based compensation expense, net of adjusted tax rate |
|
|
0.09 |
|
|
|
0.15 |
|
|
|
0.29 |
|
|
|
0.32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP earnings per diluted share |
|
$ |
0.33 |
|
|
$ |
0.43 |
|
|
$ |
1.04 |
|
|
$ |
1.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
Effective tax rate |
|
|
58.2 |
% |
|
|
8.6 |
% |
|
|
1,955.6 |
% |
|
|
32.0 |
% |
Effect on tax rate of Washington, D.C. tax law change, including write-off of Washington, D.C. income tax credits |
|
|
|
|
|
|
|
|
|
|
(1,773.6 |
%) |
|
|
|
|
Effect on tax rate of loss on financing activities |
|
|
(9.0 |
%) |
|
|
|
|
|
|
(17.9 |
%) |
|
|
|
|
Effect on tax rate of unconsolidated equity method investment related FIN 48 liability |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect on tax rate of Royall acquisition costs and other acquisition-related tax items |
|
|
(3.3 |
%) |
|
|
|
|
|
|
(119.7 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted effective tax rate |
|
|
45.9 |
% |
|
|
8.6 |
% |
|
|
44.4 |
% |
|
|
32.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2014 |
|
|
|
|
|
|
Weighted average common shares outstanding Diluted |
|
|
42,788 |
|
|
|
36,703 |
|
|
|
41,900 |
|
|
|
36,983 |
|
Diluted shares outstanding (1) |
|
|
|
|
|
|
|
|
|
|
525 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted weighted average common shares outstanding Diluted |
|
|
42,788 |
|
|
|
36,703 |
|
|
|
42,425 |
|
|
|
36,983 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
For non-GAAP purposes the Company has net income, therefore has included diluted shares in its calculation of non-GAAP EPS. |
THE ADVISORY BOARD COMPANY
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
AND OTHER OPERATING STATISTICS
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Selected Growth |
|
|
Nine Months Ended September 30, |
|
|
Selected Growth |
|
|
|
2015 |
|
|
2014 |
|
|
Rates |
|
|
2015 |
|
|
2014 |
|
|
Rates |
|
Statements of Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (1) |
|
$ |
200,238 |
|
|
$ |
144,220 |
|
|
|
38.8 |
% |
|
$ |
564,694 |
|
|
$ |
424,041 |
|
|
|
33.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services, excluding depreciation and amortization (2) (3) |
|
|
101,373 |
|
|
|
74,078 |
|
|
|
|
|
|
|
288,901 |
|
|
|
215,491 |
|
|
|
|
|
Member relations and marketing (2) |
|
|
30,792 |
|
|
|
26,792 |
|
|
|
|
|
|
|
90,893 |
|
|
|
79,780 |
|
|
|
|
|
General and administrative (2) (4) (5) |
|
|
30,678 |
|
|
|
24,573 |
|
|
|
|
|
|
|
93,205 |
|
|
|
66,028 |
|
|
|
|
|
Depreciation and amortization (6) |
|
|
18,494 |
|
|
|
9,679 |
|
|
|
|
|
|
|
55,067 |
|
|
|
27,225 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
18,901 |
|
|
|
9,098 |
|
|
|
|
|
|
|
36,628 |
|
|
|
35,517 |
|
|
|
|
|
Other (expense) income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(5,450 |
) |
|
|
|
|
|
|
|
|
|
|
(16,333 |
) |
|
|
|
|
|
|
|
|
Other (expense) income, net |
|
|
(1,150 |
) |
|
|
(851 |
) |
|
|
|
|
|
|
(2,280 |
) |
|
|
591 |
|
|
|
|
|
Loss on financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(17,398 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other (expense) income, net |
|
|
(6,600 |
) |
|
|
(851 |
) |
|
|
|
|
|
|
(36,011 |
) |
|
|
591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before provision for income taxes and equity in loss of unconsolidated entities |
|
|
12,301 |
|
|
|
8,247 |
|
|
|
|
|
|
|
617 |
|
|
|
36,108 |
|
|
|
|
|
Provision for income taxes |
|
|
(7,156 |
) |
|
|
(710 |
) |
|
|
|
|
|
|
(12,066 |
) |
|
|
(11,540 |
) |
|
|
|
|
Equity in loss of unconsolidated entities |
|
|
(3,289 |
) |
|
|
(1,197 |
) |
|
|
|
|
|
|
(1,668 |
) |
|
|
(6,078 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) before allocation to noncontrolling interest |
|
|
1,856 |
|
|
|
6,340 |
|
|
|
|
|
|
|
(13,117 |
) |
|
|
18,490 |
|
|
|
|
|
Net loss and accretion to redemption value of noncontrolling interest |
|
|
|
|
|
|
150 |
|
|
|
|
|
|
|
|
|
|
|
(6,890 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common stockholders |
|
$ |
1,856 |
|
|
$ |
6,490 |
|
|
|
|
|
|
$ |
(13,117 |
) |
|
$ |
11,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable to common stockholders per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.04 |
|
|
$ |
0.18 |
|
|
|
|
|
|
$ |
(0.31 |
) |
|
$ |
0.32 |
|
|
|
|
|
Diluted |
|
$ |
0.04 |
|
|
$ |
0.18 |
|
|
|
|
|
|
$ |
(0.31 |
) |
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
42,320 |
|
|
|
36,191 |
|
|
|
|
|
|
|
41,900 |
|
|
|
36,270 |
|
|
|
|
|
Diluted |
|
|
42,788 |
|
|
|
36,703 |
|
|
|
|
|
|
|
41,900 |
|
|
|
36,983 |
|
|
|
|
|
|
|
|
|
|
|
|
Contract Value (at end of period) |
|
$ |
760,301 |
|
|
$ |
561,645 |
|
|
|
35.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentages of Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services, excluding depreciation and amortization (2) (3) |
|
|
50.6 |
% |
|
|
51.4 |
% |
|
|
|
|
|
|
51.2 |
% |
|
|
50.8 |
% |
|
|
|
|
Member relations and marketing (2) |
|
|
15.4 |
% |
|
|
18.6 |
% |
|
|
|
|
|
|
16.1 |
% |
|
|
18.8 |
% |
|
|
|
|
General and administrative (2) (4) (5) |
|
|
15.3 |
% |
|
|
17.0 |
% |
|
|
|
|
|
|
16.5 |
% |
|
|
15.6 |
% |
|
|
|
|
Depreciation and amortization (6) |
|
|
9.2 |
% |
|
|
6.7 |
% |
|
|
|
|
|
|
9.8 |
% |
|
|
6.4 |
% |
|
|
|
|
Operating income |
|
|
9.4 |
% |
|
|
6.3 |
% |
|
|
|
|
|
|
6.5 |
% |
|
|
8.4 |
% |
|
|
|
|
Net income (loss) attributable to common stockholders |
|
|
0.9 |
% |
|
|
4.5 |
% |
|
|
|
|
|
|
-2.3 |
% |
|
|
2.7 |
% |
|
|
|
|
(1) Amounts include effect on revenue of fair value adjustments to acquisition-related deferred
revenue, as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,499 |
) |
|
|
|
|
|
|
|
|
|
|
(2) Amounts include stock-based compensation, as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
|
2,423 |
|
|
|
1,916 |
|
|
|
|
|
|
|
6,881 |
|
|
|
5,387 |
|
|
|
|
|
Member relations and marketing |
|
|
1,306 |
|
|
|
1,141 |
|
|
|
|
|
|
|
3,907 |
|
|
|
3,065 |
|
|
|
|
|
General and administrative |
|
|
3,365 |
|
|
|
3,118 |
|
|
|
|
|
|
|
11,342 |
|
|
|
7,687 |
|
|
|
|
|
|
|
(3) Amounts include fair value adjustments of acquisition-related earn-out liabilities, as
follows: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
|
|
(1,057 |
) |
|
|
(400 |
) |
|
|
|
|
|
|
(2,140 |
) |
|
|
(4,600 |
) |
|
|
|
|
|
|
(4) Amounts include acquisition and transaction related costs, as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,610 |
|
|
|
268 |
|
|
|
|
|
|
|
(5) Amounts include reversal of vacation accrual charge related to change in fiscal year as
follows: |
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative |
|
|
|
|
|
|
850 |
|
|
|
|
|
|
|
(850 |
) |
|
|
850 |
|
|
|
|
|
|
|
(6) Amounts include amortization of acquisition-related intangibles, as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
7,740 |
|
|
|
2,473 |
|
|
|
|
|
|
|
23,320 |
|
|
|
7,201 |
|
|
|
|
|
THE ADVISORY BOARD COMPANY
CONSOLIDATED BALANCE SHEETS
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
September 30, 2015 |
|
|
December 31, 2014 |
|
|
|
(unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
56,075 |
|
|
$ |
72,936 |
|
Marketable securities, current |
|
|
|
|
|
|
14,714 |
|
Membership fees receivable, net |
|
|
604,075 |
|
|
|
539,061 |
|
Prepaid expenses and other current assets |
|
|
25,388 |
|
|
|
23,254 |
|
Deferred income taxes, current |
|
|
16,159 |
|
|
|
14,695 |
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
701,697 |
|
|
|
664,660 |
|
|
|
|
Property and equipment, net |
|
|
182,934 |
|
|
|
135,107 |
|
Intangible assets, net |
|
|
285,440 |
|
|
|
38,973 |
|
Deferred incentive compensation and other charges |
|
|
80,787 |
|
|
|
86,045 |
|
Goodwill |
|
|
842,859 |
|
|
|
186,895 |
|
Investments in unconsolidated entities |
|
|
3,077 |
|
|
|
9,316 |
|
Other non-current assets |
|
|
5,698 |
|
|
|
5,370 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,102,492 |
|
|
$ |
1,126,366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Deferred revenue, current |
|
$ |
586,360 |
|
|
$ |
501,785 |
|
Accounts payable and accrued liabilities |
|
|
76,295 |
|
|
|
80,284 |
|
Accrued incentive compensation |
|
|
27,851 |
|
|
|
32,073 |
|
Debt, current |
|
|
27,885 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
718,391 |
|
|
|
614,142 |
|
|
|
|
Deferred revenue, net of current portion |
|
|
157,911 |
|
|
|
167,014 |
|
Deferred income taxes, net of current portion |
|
|
119,707 |
|
|
|
9,855 |
|
Debt, net of current portion |
|
|
529,422 |
|
|
|
|
|
Other long-term liabilities |
|
|
12,101 |
|
|
|
15,304 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
1,537,532 |
|
|
|
806,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity: |
|
|
|
|
|
|
|
|
Common stock |
|
|
419 |
|
|
|
361 |
|
Additional paid-in capital |
|
|
735,024 |
|
|
|
442,528 |
|
Accumulated deficit |
|
|
(169,030 |
) |
|
|
(122,920 |
) |
Accumulated other comprehensive income |
|
|
(1,453 |
) |
|
|
82 |
|
|
|
|
|
|
|
|
|
|
Total stockholders equity |
|
|
564,960 |
|
|
|
320,051 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity |
|
$ |
2,102,492 |
|
|
$ |
1,126,366 |
|
|
|
|
|
|
|
|
|
|
THE ADVISORY BOARD COMPANY
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
2015 |
|
|
2014 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net (loss) income before allocation to noncontrolling interest |
|
$ |
(13,117 |
) |
|
$ |
18,490 |
|
Adjustments to reconcile net (loss) income before allocation to noncontrolling interest to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
55,067 |
|
|
|
27,225 |
|
Loss on financing activities |
|
|
17,398 |
|
|
|
|
|
Amortization of debt issuance costs |
|
|
983 |
|
|
|
|
|
Deferred income taxes |
|
|
9,912 |
|
|
|
11,018 |
|
Excess tax benefits from stock-based awards |
|
|
(2,804 |
) |
|
|
(5,011 |
) |
Stock-based compensation expense |
|
|
22,130 |
|
|
|
16,139 |
|
Amortization of marketable securities premiums |
|
|
|
|
|
|
1,664 |
|
(Gain) loss on investment in common stock warrants |
|
|
(70 |
) |
|
|
180 |
|
Equity in loss of unconsolidated entities |
|
|
1,668 |
|
|
|
6,078 |
|
Changes in operating assets and liabilities (net of the effect of acquisition): |
|
|
|
|
|
|
|
|
Membership fees receivable |
|
|
(35,774 |
) |
|
|
(10,876 |
) |
Prepaid expenses and other current assets |
|
|
7,978 |
|
|
|
(5,746 |
) |
Deferred incentive compensation and other charges |
|
|
2,977 |
|
|
|
7,248 |
|
Other non-current assets |
|
|
(258 |
) |
|
|
|
|
Deferred revenue |
|
|
57,172 |
|
|
|
(19,634 |
) |
Accounts payable and accrued liabilities |
|
|
(5,595 |
) |
|
|
(4,264 |
) |
Acquisition-related earn-out payments |
|
|
(2,198 |
) |
|
|
(3,073 |
) |
Accrued incentive compensation |
|
|
(4,222 |
) |
|
|
(8,659 |
) |
Other long-term liabilities |
|
|
(3,203 |
) |
|
|
(8,088 |
) |
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
|
108,044 |
|
|
|
22,691 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(39,985 |
) |
|
|
(35,000 |
) |
Capitalized external use software development costs |
|
|
(2,965 |
) |
|
|
(3,871 |
) |
Cash paid for acquisitions, net of cash acquired |
|
|
(746,693 |
) |
|
|
(25,830 |
) |
Cash paid for investment in unconsolidated entity |
|
|
(3,006 |
) |
|
|
|
|
Redemptions of marketable securities |
|
|
14,714 |
|
|
|
85,959 |
|
Purchases of marketable securities |
|
|
|
|
|
|
(32,657 |
) |
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(777,935 |
) |
|
|
(11,399 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Proceeds from debt, net |
|
|
1,280,292 |
|
|
|
|
|
Pay down of debt |
|
|
(739,377 |
) |
|
|
|
|
Debt issuance costs |
|
|
(2,568 |
) |
|
|
|
|
Proceeds from issuance of common stock, net of selling costs |
|
|
148,786 |
|
|
|
|
|
Proceeds from issuance of common stock from exercise of stock options |
|
|
3,262 |
|
|
|
6,927 |
|
Withholding of shares to satisfy minimum employee tax withholding |
|
|
(6,058 |
) |
|
|
(7,735 |
) |
Proceeds from issuance of stock under employee stock purchase plan |
|
|
389 |
|
|
|
445 |
|
Acquisition-related earn-out payments |
|
|
(1,500 |
) |
|
|
|
|
Excess tax benefits from stock-based awards |
|
|
2,804 |
|
|
|
5,011 |
|
Purchases of treasury stock |
|
|
(33,000 |
) |
|
|
(41,772 |
) |
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
653,030 |
|
|
|
(37,124 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
|
(16,861 |
) |
|
|
(25,832 |
) |
Cash and cash equivalents, beginning of period |
|
|
72,936 |
|
|
|
52,717 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
|
$ |
56,075 |
|
|
$ |
26,885 |
|
|
|
|
|
|
|
|
|
|
The Advisory Board Company (MM) (NASDAQ:ABCO)
Historical Stock Chart
From Apr 2024 to May 2024
The Advisory Board Company (MM) (NASDAQ:ABCO)
Historical Stock Chart
From May 2023 to May 2024