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Exhibit 99.1

Blackbaud, Inc. Announces Second Quarter 2011 Results

Announces Third Quarter 2011 Dividend

CHARLESTON, S.C. – August 4, 2011 – Blackbaud, Inc. (Nasdaq: BLKB), the leading provider of software and related services designed specifically for nonprofit organizations, today announced financial results for its second quarter ended June 30, 2011.

Marc Chardon, Chief Executive Officer of Blackbaud, stated, “We are very pleased with the company’s financial performance for the second quarter, which was highlighted by revenue and profitability that were above the high-end of our guidance. Market demand remains stable and our general markets and enterprise business units are executing at a high level.”

“Blackbaud continues to reinforce its leadership position at the high-end of the market. In the second quarter, we matched our record first quarter performance, closing five Enterprise CRM deals, and are well on our way to having a record year in this important growth segment of our market. We are increasingly leveraging our product investments and experience in developing best practices for large and complex implementations, as well as what we have learned in working with the hundreds of enterprise customers using our Target Analytics, Target Software and PIDI solutions,” Chardon added. “The strong adoption of our online fundraising solutions, including a record quarter of unit sales from our Sphere and Net Community offerings, particularly in our general markets business unit, continues to drive strong growth in our subscription revenue.”

Blackbaud reported total revenue of $93.4 million for the quarter ended June 30, 2011, an increase of 16% compared to $80.7 million for the second quarter of 2010. Income from operations and net income, determined in accordance with GAAP, were $13.8 million and $8.9 million, respectively, compared with $11.2 million and $6.8 million, respectively, for the second quarter of 2010. Diluted earnings per share were $0.20 for the quarter ended June 30, 2011, compared with $0.15 in the same period last year.

Non-GAAP income from operations, which excludes stock-based compensation expense and amortization of intangibles arising from business combinations, was $19.2 million, an increase of 21% compared to $15.8 million in the same period last year. Non-GAAP net income was $11.8 million for the quarter ended June 30, 2011, an increase of 24% compared to $9.5 million in the same period last year. Non-GAAP diluted earnings per share were $0.27 for the quarter ended June 30, 2011, an increase of 23% compared with $0.22 in the same period last year.

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 second quarter with $33.4 million in cash, an increase from $24.1 million at the end of the previous quarter. The company generated $37.8 million in cash from operations for the six months ended June 30, 2011, an increase of 53% compared to the same period last year.

“Blackbaud delivered mid-teens revenue growth for the second consecutive quarter, and we believe the company is well positioned to do the same for the full year 2011,” said Timothy V. Williams, Chief Financial Officer of Blackbaud. “The return to solid services revenue growth is encouraging considering it was particularly hard hit during the economic downturn. In addition, we are very pleased with the growth of our recurring revenue, which has an annualized run rate that is approaching $250 million, including subscription revenue that is now at over $100 million annualized.”

Third Quarter 2011 Dividend and Share Repurchase Program

Blackbaud announced today that its Board of Directors has approved a third quarter dividend of $0.12 per share payable on September 15, 2011, to stockholders of record on August 26, 2011. Additionally, as of June 30, 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, August 4, 2011, at 5:00 p.m. (Eastern Time) to discuss the Company’s financial results, operations and related matters. To access this call, dial 888-542-1139 (domestic) or 719-325-2474 (international). A replay of this conference call will be available through August 11, 2011, at 877-870-5176 (domestic) or 858-384-5517 (international). The replay passcode is 6644079. 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)    June 30,
2011
    December 31,
2010
 

Assets

    

Current assets:

    

Cash and cash equivalents

       $ 33,397          $ 27,974   

Donor restricted cash

     10,836        16,359   

Accounts receivable, net of allowance of $2,826 and $2,687 at June 30, 2011 and December 31, 2010, respectively

     68,610        59,804   

Prepaid expenses and other current assets

     29,770        33,847   

Deferred tax asset, current portion

     5,173        5,164   
  

 

 

 

Total current assets

     147,786        143,148   

Property and equipment, net

     25,558        22,963   

Deferred tax asset

     39,082        44,639   

Goodwill

     89,450        76,247   

Intangible assets, net

     42,229        38,515   

Other assets

     5,494        2,579   
  

 

 

 

Total assets

       $ 349,599          $ 328,091   
  

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities:

    

Trade accounts payable

       $ 13,344          $ 9,883   

Accrued expenses and other current liabilities

     27,831        28,322   

Donations payable

     10,835        16,359   

Deferred revenue

     146,895        141,149   
  

 

 

 

Total current liabilities

     198,905        195,713   

Deferred revenue, noncurrent

     10,593        6,900   

Other noncurrent liabilities

     2,605        2,419   
  

 

 

 

Total liabilities

     212,103        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, 53,469,136 and 53,316,280 shares issued at June 30, 2011 and December 31, 2010, respectively

     54        53   

Additional paid-in capital

     167,402        158,419   

Treasury stock, at cost; 8,857,378 and 8,842,882 shares at June 30, 2011 and December 31, 2010, respectively

     (161,596     (161,186

Accumulated other comprehensive loss

     (516     (512

Retained earnings

     132,152        126,285   
  

 

 

 

Total stockholders’ equity

     137,496        123,059   
  

 

 

 

Total liabilities and stockholders’ equity

       $ 349,599          $ 328,091   
  

 

 

 


Blackbaud, Inc.

Consolidated statements of operations

(Unaudited)

 

     Three months ended June 30,     Six months ended June 30,  
(in thousands, except share and per share amounts)    2011     2010     2011     2010  

Revenue

        

License fees

       $ 5,097          $ 6,972          $ 9,648          $ 12,139   

Subscriptions

     25,870        20,386        51,380        39,562   

Services

     27,976        20,886        52,008        40,975   

Maintenance

     32,601        30,957        64,434        61,554   

Other revenue

     1,858        1,470        3,206        2,680   
  

 

 

   

 

 

 

Total revenue

     93,402        80,671        180,676        156,910   
  

 

 

   

 

 

 

Cost of revenue

        

Cost of license fees

     1,031        975        1,719        1,592   

Cost of subscriptions

     10,473        7,616        19,635        14,842   

Cost of services

     20,176        15,837        39,181        31,753   

Cost of maintenance

     6,035        5,925        12,286        11,695   

Cost of other revenue

     1,411        1,333        2,545        2,450   
  

 

 

   

 

 

 

Total cost of revenue

     39,126        31,686        75,366        62,332   
  

 

 

   

 

 

 

Gross profit

     54,276        48,985        105,310        94,578   
  

 

 

   

 

 

 

Operating expenses

        

Sales and marketing

     19,048        19,023        38,393        35,446   

Research and development

     12,033        11,710        23,999        22,619   

General and administrative

     9,176        6,901        18,377        15,298   

Amortization

     245        196        479        392   
  

 

 

   

 

 

 

Total operating expenses

     40,502        37,830        81,248        73,755   
  

 

 

   

 

 

 

Income from operations

     13,774        11,155        24,062        20,823   

Interest income

     45        23        78        43   

Interest expense

     (60     (79     (84     (125

Other income (expense), net

     216        (185     285        (182
  

 

 

   

 

 

 

Income before provision for income taxes

     13,975        10,914        24,341        20,559   

Income tax provision

     5,047        4,124        7,829        7,817   
  

 

 

   

 

 

 

Net income

       $ 8,928          $ 6,790          $ 16,512          $ 12,742   
  

 

 

   

 

 

 

Earnings per share

        

Basic

       $ 0.21          $ 0.16          $ 0.38          $ 0.29   

Diluted

       $ 0.20          $ 0.15          $ 0.38          $ 0.29   

Common shares and equivalents outstanding

        

Basic weighted average shares

     43,447,007        43,260,625        43,399,874        43,347,630   

Diluted weighted average shares

     44,098,046        44,027,307        44,004,712        44,126,259   

Dividends per share

       $ 0.12          $ 0.11          $ 0.24          $ 0.22   


Blackbaud, Inc.

Consolidated statements of cash flows

(Unaudited)

 

      Six months ended June 30,  
(in thousands)    2011     2010  

Cash flows from operating activities

    

Net income

           $ 16,512              $ 12,742   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

     8,107        7,844   

Provision for doubtful accounts and sales returns

     2,366        702   

Stock-based compensation expense

     7,326        6,060   

Excess tax benefits from stock based compensation

     (226     (1,040

Deferred taxes

     2,453        1,737   

Other non-cash adjustments

     (617     (140

Changes in operating assets and liabilities, net of acquisition of businesses:

    

Accounts receivable

     (10,621     (12,540

Prepaid expenses and other assets

     5,233        1,318   

Trade accounts payable

     1,355        1,411   

Accrued expenses and other liabilities

     (3,045     (3,517

Donor restricted cash

     5,540        5,929   

Donations payable

     (5,540     (5,929

Deferred revenue

     9,003        10,109   
  

 

 

 

Net cash provided by operating activities

     37,846        24,686   
  

 

 

 

Cash flows from investing activities

    

Purchase of property and equipment

     (7,703     (6,761

Purchase of net assets of acquired companies, net of cash acquired

     (16,475     (390

Purchase of investment

     -        (2,000

Purchase of intangible assets

     -        (130

Proceeds from sale of assets

     719        -   
  

 

 

 

Net cash used in investing activities

     (23,459     (9,281
  

 

 

 

Cash flows from financing activities

    

Dividend payments to stockholders

     (10,686     (9,839

Proceeds from exercise of stock options

     1,925        2,980   

Excess tax benefits from stock based compensation

     226        1,040   

Purchase of treasury stock

     -        (21,542

Proceeds from issuance of debt

     -        4,000   

Payments on debt

     -        (1,071

Payments of deferred financing fees

     (767     -   

Payments on capital lease obligations

     (25     (112
  

 

 

 

Net cash used in financing activities

     (9,327     (24,544
  

 

 

 

Effect of exchange rate on cash and cash equivalents

     363        (366
  

 

 

 

Net increase (decrease) in cash and cash equivalents

     5,423        (9,505

Cash and cash equivalents, beginning of period

     27,974        22,769   
  

 

 

 

Cash and cash equivalents, end of period

           $ 33,397              $ 13,264   
  

 

 

 


Blackbaud, Inc.

Reconciliation of GAAP to Non-GAAP financial measures

(Unaudited)

 

      Three months
ended June 30,
    Six months
ended June 30,
 
(in thousands, except per share amounts)    2011     2010     2011     2010  

GAAP revenue

   $ 93,402      $ 80,671      $ 180,676      $ 156,910   
  

 

 

   

 

 

 

GAAP gross profit

   $ 54,276      $ 48,985      $ 105,310      $ 94,578   

Non-GAAP adjustments:

        

Add: Stock-based compensation expense

     810        667        1,611        1,372   

Add: Amortization of intangibles from business combinations

     1,605        1,540        3,196        3,046   
  

 

 

   

 

 

 

Total Non-GAAP adjustments

     2,415        2,207        4,807        4,418   

Non-GAAP gross profit

   $ 56,691      $ 51,192      $ 110,117      $ 98,996   
  

 

 

   

 

 

 

Non-GAAP gross margin

     61     63     61     63
  

 

 

   

 

 

 

GAAP income from operations

   $ 13,774      $ 11,155      $ 24,062      $ 20,823   

Non-GAAP adjustments:

        

Add: Stock-based compensation expense

     3,530        2,908        7,326        6,060   

Add: Amortization of intangibles from business combinations

     1,850        1,736        3,675        3,438   

Add: Acquisition-related expenses

     -        -        1,054        -   

Less: Gain on sale of assets

     -        -        (549     -   
  

 

 

   

 

 

 

Total Non-GAAP adjustments

     5,380        4,644        11,506        9,498   

Non-GAAP income from operations

   $ 19,154      $ 15,799      $ 35,568      $ 30,321   
  

 

 

   

 

 

 

Non-GAAP operating margin

     21     20     20     19
  

 

 

   

 

 

 

GAAP net income

   $ 8,928      $ 6,790      $ 16,512      $ 12,742   

Non-GAAP adjustments:

        

Add: Total Non-GAAP adjustments affecting income from operations

     5,380        4,644        11,506        9,498   

Add: Tax impact related to Non-GAAP adjustments

     (2,501     (1,943     (6,152     (3,905
  

 

 

   

 

 

 

Non-GAAP net income

   $ 11,807      $ 9,491      $ 21,866      $ 18,335   
  

 

 

   

 

 

 

Shares used in computing Non-GAAP diluted earnings per share

     44,098        44,027        44,005        44,126   
  

 

 

   

 

 

 

Non-GAAP diluted earnings per share

   $ 0.27      $ 0.22      $ 0.50      $ 0.42   
  

 

 

   

 

 

 

Detail of Non-GAAP adjustments:

        

Stock-based compensation expense:

        

Cost of revenue

        

Cost of subscriptions

   $ 225      $ 75      $ 327      $ 167   

Cost of services

     447        414        904        850   

Cost of maintenance

     138        178        380        355   
  

 

 

   

 

 

 

Subtotal

     810        667        1,611        1,372   

Operating expenses

        

Sales and marketing

     272        344        629        705   

Research and development

     671        704        1,514        1,415   

General and administrative

     1,777        1,193        3,572        2,568   
  

 

 

   

 

 

 

Subtotal

     2,720        2,241        5,715        4,688   
  

 

 

   

 

 

 

Total stock-based compensation expense

   $ 3,530      $ 2,908      $ 7,326      $ 6,060   
  

 

 

   

 

 

 

Amortization of intangibles from business combinations:

        

Cost of revenue

        

Cost of license fees

   $ 126      $ 115      $ 258      $ 209   

Cost of subscriptions

     816        760        1,617        1,520   

Cost of services

     391        341        778        677   

Cost of maintenance

     253        306        505        603   

Cost of other revenue

     19        18        38        37   
  

 

 

   

 

 

 

Subtotal

     1,605        1,540        3,196        3,046   

Operating expenses

     245        196        479        392   
  

 

 

   

 

 

 

Total amortization of intangibles from business combinations

   $ 1,850      $ 1,736      $ 3,675      $ 3,438