The Advisory Board Company F2Q09 (Qtr End 09/30/08) Earnings Call Transcript

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2008-11-18 00:36:10.0

Tags: Advisory Board, Call Transcript, Earnings, Morgan Stanley, Sales Strategy, Pricing, Marketing Research, Sales, Marketing, Seeking Alpha, Advisory Board, Call Transcript, Earnings, Morgan Stanley, Sales Strategy, Pricing, Marketing Research, Sales, Marketing, Seeking Alpha, Advisory Board Co.

Question-and-Answer Session

Operator

(Operator instructions) And your first question comes from the line of Vance Edelson from Morgan Stanley. Please proceed.

Vance Edelson – Morgan Stanley

Hi, thanks. It’s Vance Edelson. Could you just comment when it comes to the selling process and the retention efforts, if you could give us a feel for the flexibility that you might have in terms of pricing as a middle ground between keeping a customer and losing one or not being able to sell them a new service? Do you have flexibility in that regard, would you say? Thanks.

Robert Musslewhite

Hi, Vance. You know the pricing environment for us has remained relatively stable. We don’t do a lot of discounting as our prices are still low on a relative basis that it’s generally not a preferred lever for us. Of course, in select situations where we feel it can move the needle on decisions, we’ll absolutely do it.

Vance Edelson – Morgan Stanley

Okay, thanks. And in terms of the – I may have missed it, but the member relations and marketing expenses ticked up a little bit, are there one timers there or is that a decent run rate going forward?

Michael Kirshbaum

I think if you think of the expense growth year-over-year, that’s mostly due to the increase in sales teams that we generally have been running this year about 50% growth over the prior year and historically have staff in the kind of 10% to 50% increase in terms of sales teams. As a percentage of revenue, a little bit of it is debt increase cost compared to lower revenue growth.

Vance Edelson – Morgan Stanley

Okay. And just one more for you, in terms of the uses of that cash going forward, does the share buyback remain a priority would you say at this point?

Michael Kirshbaum

Yes, I think we’ve been pleased with the performance of the share repurchase program and we’ll continue to do that opportunistically.

Vance Edelson – Morgan Stanley

Okay, great. Thanks a lot, guys.

Robert Musslewhite

Thank you.

Operator

And your next question comes from the line of Brandon Dobell from William Blair. Please proceed.

Brandon Dobell – William Blair

Hi, guys. Thanks. Trying to gauge your customers and buyer behavior, however you want to term it, relative to the general corporate spending environment versus what the states are starting to see from a budgetary perspective. Do you think there is more or less relevance to one of those or two as you think about the new business trends and your customer’s ability to renew at the same rate those kinds of things?

 

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