The Corporate Executive Board Company (EXBD)

Things don’t seem to go well for EXBD facing problems with shortfalls in contract values mainly due to new sales efforts. The sales team had dropped to just 255 members due to its inability to generate quality resumes to fill its position and does not have enough feet on the street. Revenues increased 18.5% for the first quarter with net income improving to 19%. Apart from sales force headcount decline it was also not able to leverage the talented workforce. Uncontrollable factors such as the down turn in U.S economy coupled with tighter budgeting environment in the corporate headquarter further sealed the fate.





However it has resorted to a talent management plan that includes recruiting, retention and development of staff members and the get the sales effort back on track. To address the challenging corporate budgeting environment it has had new program launches making sure that the available tools and content deliver immediate ROI for member and prospect companies.





Despite the above-mentioned facts the business model of EXBD looks good being a capital efficient business. It enjoys the dynamics of efficient cash flow that improved to $84.2 million as a result of continued profitable operations, strong collections and other tax benefits. Balance sheet looks good and has refunded excess cash in the form of share buyback. Though the long-term prospects look good, it’s better to avoid the stock for the time being and accumulate once the structural issues faced are resolved.