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| 8-K - FORM 8-K - BLACKBAUD INC | d8k.htm |
Exhibit 99.1
Blackbaud, Inc. Announces First Quarter 2011 Results
Announces Second Quarter 2011 Dividend
CHARLESTON, S.C. – May 9, 2011 – Blackbaud, Inc. (Nasdaq: BLKB), the leading provider of software and related services designed specifically for nonprofit organizations, today announced financial results for its first quarter ended March 31, 2011.
Marc Chardon, Chief Executive Officer of Blackbaud, stated, “The first quarter was a solid start to 2011 as the company’s revenue and profit growth accelerated and exceeded the high-end of our guidance. The growing momentum of our business is evidenced by our total revenue returning to double digit growth for the first time in over two years.”
“Blackbaud continued to build on its already strong leadership position in the nonprofit market. At the high-end of the market we closed a record number of Enterprise CRM deals during the quarter. We believe our unique combination of best-in-class high touch and high volume fundraising solutions, vertically focused product investments and growing knowledge of and experience with implementation best practices will enable us to increasingly distance ourselves from the competition in this market segment . At the same time, we believe Blackbaud is well positioned to benefit from an improving economic environment due to strong momentum from our online fundraising offerings and expanding suite of integrated, packaged offerings that only Blackbaud is capable of delivering,” Chardon concluded.
Blackbaud reported total revenue of $87.3 million for the quarter ended March 31, 2011, an increase of 15% compared to $76.2 million for the first quarter of 2010. Income from operations and net income, determined in accordance with GAAP, were $10.3 million and $7.6 million, respectively, compared with $9.7 million and $6.0 million, respectively, for the first quarter of 2010. Diluted earnings per share were $0.17 for the quarter ended March 31, 2011, compared with $0.13 in the same period last year.
Non-GAAP income from operations, which excludes stock-based compensation expense, amortization of intangibles arising from business combinations, a one-time expense incurred in connection with a recent acquisition and a gain related to the sale of a business, was $16.4 million, compared with $14.5 million in the same period last year. Non-GAAP net income was $10.1 million for the quarter ended March 31, 2011, compared with $8.8 million in the same period last year. Non-GAAP diluted earnings per share were $0.23 for the quarter ended March 31, 2011, compared with $0.20 in the same period last year.
Both GAAP and non-GAAP results for the quarter include a positive one-time net adjustment of approximately $900,000 to revenue. This adjustment resulted from the company determining that revenue from certain subscription-based offerings was not properly recorded in prior years, principally in 2010. This adjustment also had a positive impact of approximately $500,000 on GAAP and non-GAAP operating income for the quarter and $0.01 per share on GAAP and non-GAAP diluted earnings per share. Even excluding the benefit of this one-time positive adjustment, the company’s revenue, non-GAAP operating income and non-GAAP EPS exceeded the high-end of its guidance.
A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”
The Company ended the first quarter with $24.1 million in cash, compared to $28.0 million at the end of the previous quarter. The company generated $17.5 million in cash from operations in the first quarter, more than double the $7.3 million generated in last year’s first quarter. The company used $16.5 million for the acquisition of Public Interest Data, Inc. (PIDI) and $5.3 million for the quarterly payment of dividends to stockholders.
Timothy V. Williams, Chief Financial Officer of Blackbaud, stated, “Our subscription-based offerings continue to be a primary driver of our overall revenue as subscriptions revenue increased to over 5 times the size of license revenue during the first quarter, excluding the benefit
of the one-time positive adjustment,” Williams added, “We believe that we are on track to emerge from the economic downturn with a stronger market position and even more compelling financial model characterized by recurring revenue, low-to-mid teens total revenue growth and best-in-class profitability and cash flow.”
Second Quarter 2011 Dividend and Share Repurchase Program
Blackbaud announced today that its Board of Directors has approved a second quarter dividend of $0.12 per share payable on June 15, 2011, to stockholders of record on May 27, 2011. Additionally, as of March 31, 2011, $50.0 million remained available under the Company’s share repurchase program, which became effective on August 1, 2010.
Conference Call Details
Blackbaud will host a conference call today, May 9, 2011, at 5:00 p.m. (Eastern Time) to discuss the Company’s financial results, operations and related matters. To access this call, dial 888-461-2017 (domestic) or 719-325-2498 (international). A replay of this conference call will be available through May 16, 2011, at 877-870-5176 (domestic) or 858-384-5517 (international). The replay passcode is 1685027. A live webcast of this conference call will be available on the “Investor Relations” page of the Company’s website at www.Blackbaud.com/investorrelations, and a replay will be archived on the website as well.
About Blackbaud
Blackbaud is the leading global provider of software and services designed specifically for nonprofit organizations, enabling them to improve operational efficiency, build strong relationships, and raise more money to support their missions. Approximately 24,000 organizations — including The American Red Cross, Cancer Research UK, Earthjustice, International Fund for Animal Welfare, Lincoln Center, The Salvation Army, The Taft School, Tulsa Community Foundation, Ursinus College, the WGBH Educational Foundation, and Yale University — use one or more Blackbaud products and services for fundraising, constituent relationship management, financial management, website management, direct marketing, education administration, ticketing, business intelligence, prospect research, consulting, and analytics. Since 1981, Blackbaud’s sole focus and expertise has been partnering with nonprofits and providing them the solutions they need to make a difference in their local communities and worldwide. Headquartered in the United States, Blackbaud also has operations in Australia, Canada, Hong Kong, the Netherlands, and the United Kingdom. For more information, visit www.Blackbaud.com.
Forward-looking Statements
Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements that involve a number of risks and uncertainties. Although Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: general economic risks; uncertainty regarding increased business and renewals from existing customers; continued success in sales growth; management of integration of acquired companies and other risks associated with acquisitions; risks associated with successful implementation of multiple integrated software products; the ability to attract and retain key personnel; risks related to our dividend policy and share repurchase program, including potential limitations on our ability to grow and the possibility that we might discontinue payment of dividends; risks relating to restrictions imposed by the credit facility; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organizations; technological changes that make our products and services less competitive; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from
Blackbaud’s investor relations department. All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.
Non-GAAP Financial Measures
Blackbaud has provided in this release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP income from operations and margin, non-GAAP net income and non-GAAP diluted earnings per share. Blackbaud uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Blackbaud’s ongoing operational performance. Blackbaud believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial results with other companies in Blackbaud’s industry, many of which present similar non-GAAP financial measures to investors. As noted, the non-GAAP financial results discussed above exclude stock-based compensation expense, costs associated with amortization of intangibles arising from business combinations, one-time write-offs or expenses incurred in connection with acquisitions and a gain in connection with the sale of a business.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. As previously mentioned, a reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.
Investor Contact:
Tim Dolan
ICR
timothy.dolan@icrinc.com
617-956-6727
Media Contact:
Melanie Mathos
Blackbaud, Inc.
melanie.mathos@Blackbaud.com
843-216-6200 x3307
SOURCE: Blackbaud, Inc.
Blackbaud, Inc.
Consolidated balance sheets
(Unaudited)
| (in thousands, except share amounts) | March 31, 2011 |
December 31, 2010 |
||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 24,126 | $ | 27,974 | ||||
| Donor restricted cash |
14,870 | 16,359 | ||||||
| Accounts receivable, net of allowance of $2,636 and $2,687 at March 31, 2011 and December 31, 2010, respectively |
50,311 | 59,804 | ||||||
| Prepaid expenses and other current assets |
26,796 | 33,847 | ||||||
| Deferred tax asset, current portion |
5,160 | 5,164 | ||||||
| Total current assets |
121,263 | 143,148 | ||||||
| Property and equipment, net |
23,819 | 22,963 | ||||||
| Deferred tax asset |
40,839 | 44,639 | ||||||
| Goodwill |
88,935 | 76,247 | ||||||
| Intangible assets, net |
44,852 | 38,515 | ||||||
| Other assets |
2,614 | 2,579 | ||||||
| Total assets |
$ | 322,322 | $ | 328,091 | ||||
| Liabilities and stockholders' equity |
||||||||
| Current liabilities: |
||||||||
| Trade accounts payable |
$ | 9,858 | $ | 9,883 | ||||
| Accrued expenses and other current liabilities |
23,518 | 28,322 | ||||||
| Donations payable |
14,870 | 16,359 | ||||||
| Deferred revenue, current portion |
135,489 | 141,149 | ||||||
| Total current liabilities |
183,735 | 195,713 | ||||||
| Deferred revenue |
6,126 | 6,900 | ||||||
| Other liabilities |
3,288 | 2,419 | ||||||
| Total liabilities |
193,149 | 205,032 | ||||||
| Commitments and contingencies |
||||||||
| Stockholders' equity: |
||||||||
| Preferred stock; 20,000,000 shares authorized, none outstanding |
- | - | ||||||
| Common stock, $0.001 par value; 180,000,000 |
||||||||
| shares authorized, 53,350,536 and 53,316,280 shares issued at March 31, 2011 and December 31, 2010, respectively |
53 | 53 | ||||||
| Additional paid-in capital |
162,320 | 158,419 | ||||||
| Treasury stock, at cost; 8,846,663 and 8,842,882 shares at March 31, 2011 and December 31, 2010, respectively |
(161,288 | ) | (161,186 | ) | ||||
| Accumulated other comprehensive loss |
(463 | ) | (512 | ) | ||||
| Retained earnings |
128,551 | 126,285 | ||||||
| Total stockholders' equity |
129,173 | 123,059 | ||||||
| Total liabilities and stockholders' equity |
$ | 322,322 | $ | 328,091 | ||||
Blackbaud, Inc.
Consolidated statements of operations
(Unaudited)
| Three months ended March 31, |
||||||||
| (in thousands, except share and per share amounts) | 2011 | 2010 | ||||||
| Revenue |
||||||||
| License fees |
$ | 4,551 | $ | 5,167 | ||||
| Subscriptions |
25,510 | 19,176 | ||||||
| Services |
24,032 | 20,089 | ||||||
| Maintenance |
31,833 | 30,597 | ||||||
| Other revenue |
1,348 | 1,210 | ||||||
| Total revenue |
87,274 | 76,239 | ||||||
| Cost of revenue |
||||||||
| Cost of license fees |
688 | 617 | ||||||
| Cost of subscriptions |
9,162 | 7,226 | ||||||
| Cost of services |
19,005 | 15,916 | ||||||
| Cost of maintenance |
6,251 | 5,770 | ||||||
| Cost of other revenue |
1,134 | 1,117 | ||||||
| Total cost of revenue |
36,240 | 30,646 | ||||||
| Gross profit |
51,034 | 45,593 | ||||||
| Operating expenses |
||||||||
| Sales and marketing |
19,345 | 16,423 | ||||||
| Research and development |
11,966 | 10,909 | ||||||
| General and administrative |
9,202 | 8,397 | ||||||
| Amortization |
233 | 196 | ||||||
| Total operating expenses |
40,746 | 35,925 | ||||||
| Income from operations |
10,288 | 9,668 | ||||||
| Interest income |
33 | 20 | ||||||
| Interest expense |
(24 | ) | (46 | ) | ||||
| Other income, net |
69 | 3 | ||||||
| Income before provision for income taxes |
10,366 | 9,645 | ||||||
| Income tax provision |
2,782 | 3,693 | ||||||
| Net income |
$ | 7,584 | $ | 5,952 | ||||
| Earnings per share |
||||||||
| Basic |
$ 0.17 | $ 0.14 | ||||||
| Diluted |
$ 0.17 | $ 0.13 | ||||||
| Common shares and equivalents outstanding |
||||||||
| Basic weighted average shares |
43,352,216 | 43,435,218 | ||||||
| Diluted weighted average shares |
43,916,657 | 44,226,074 | ||||||
| Dividends per share |
$ 0.12 | $ 0.11 | ||||||
Blackbaud, Inc.
Consolidated statements of cash flows
(Unaudited)
| Three months ended March 31, |
||||||||
| (in thousands) | 2011 | 2010 | ||||||
| Cash flows from operating activities |
||||||||
| Net income |
$ | 7,584 | $ | 5,952 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
4,017 | 3,819 | ||||||
| Provision for doubtful accounts and sales returns |
1,124 | 457 | ||||||
| Stock-based compensation expense |
3,796 | 3,152 | ||||||
| Excess tax benefits from stock based compensation |
(193 | ) | (1,014 | ) | ||||
| Deferred taxes |
382 | 795 | ||||||
| Other non-cash adjustments |
(561 | ) | (160 | ) | ||||
| Changes in operating assets and liabilities, net of acquisition of businesses: |
||||||||
| Accounts receivable |
9,113 | 696 | ||||||
| Prepaid expenses and other assets |
7,146 | 3,274 | ||||||
| Trade accounts payable |
(1,547 | ) | 61 | |||||
| Accrued expenses and other liabilities |
(6,373 | ) | (6,356 | ) | ||||
| Donor restricted cash |
1,527 | 3,147 | ||||||
| Donations payable |
(1,527 | ) | (3,147 | ) | ||||
| Deferred revenue |
(6,976 | ) | (3,348 | ) | ||||
| Net cash provided by operating activities |
17,512 | 7,328 | ||||||
| Cash flows from investing activities |
||||||||
| Purchase of property and equipment |
(1,073 | ) | (5,069 | ) | ||||
| Purchase of net assets of acquired companies, net of cash acquired |
(16,475 | ) | - | |||||
| Purchase of intangible assets |
- | (130 | ) | |||||
| Proceeds from sale of assets |
600 | - | ||||||
| Net cash used in investing activities |
(16,948 | ) | (5,199 | ) | ||||
| Cash flows from financing activities |
||||||||
| Dividend payments to stockholders |
(5,336 | ) | (4,910 | ) | ||||
| Proceeds from exercise of stock options |
316 | 2,654 | ||||||
| Excess tax benefits from stock based compensation |
193 | 1,014 | ||||||
| Payments on debt |
- | (187 | ) | |||||
| Payments on capital lease obligations |
(14 | ) | (81 | ) | ||||
| Net cash used in financing activities |
(4,841 | ) | (1,510 | ) | ||||
| Effect of exchange rate on cash and cash equivalents |
429 | (107 | ) | |||||
| Net (decrease) increase in cash and cash equivalents |
(3,848 | ) | 512 | |||||
| Cash and cash equivalents, beginning of period |
27,974 | 22,769 | ||||||
| Cash and cash equivalents, end of period |
$ | 24,126 | $ | 23,281 | ||||
Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP financial measures
(Unaudited)
| Three months ended March 31, |
||||||||
| (in thousands, except per share amounts) | 2011 | 2010 | ||||||
| GAAP Revenue |
$ | 87,274 | $ | 76,239 | ||||
| GAAP gross profit |
$ | 51,034 | $ | 45,593 | ||||
| Non-GAAP adjustments: |
||||||||
| Add: Stock-based compensation expense |
801 | 705 | ||||||
| Add: Amortization of intangibles from business combinations |
1,591 | 1,506 | ||||||
| Total Non-GAAP adjustments |
2,392 | 2,211 | ||||||
| Non-GAAP gross profit |
$ | 53,426 | $ | 47,804 | ||||
| Non-GAAP gross margin |
61 | % | 63 | % | ||||
| GAAP income from operations |
$ | 10,288 | $ | 9,668 | ||||
| Non-GAAP adjustments: |
||||||||
| Add: Stock-based compensation expense |
3,796 | 3,152 | ||||||
| Add: Amortization of intangibles from business combinations |
1,824 | 1,702 | ||||||
| Add: Acquisition-related expenses |
1,054 | - | ||||||
| Less: Gain on sale of assets |
(549 | ) | - | |||||
| Total Non-GAAP adjustments |
6,125 | 4,854 | ||||||
| Non-GAAP income from operations |
$ | 16,413 | $ | 14,522 | ||||
| Non-GAAP operating margin |
19 | % | 19 | % | ||||
| GAAP net income |
$ | 7,584 | $ | 5,952 | ||||
| Non-GAAP adjustments: |
||||||||
| Add: Total Non-GAAP adjustments affecting income from operations |
6,125 | 4,854 | ||||||
| Add: Tax impact related to Non-GAAP adjustments |
(3,650 | ) | (1,962 | ) | ||||
| Non-GAAP net income |
$ | 10,059 | $ | 8,844 | ||||
| Shares used in computing Non-GAAP diluted earnings per share |
43,917 | 44,226 | ||||||
| Non-GAAP diluted earnings per share |
$ | 0.23 | $ | 0.20 | ||||