EX-99.1 2 exhibit991q12013.htm EXHIBIT 99.1 Exhibit 99.1 (Q1 2013)
Exhibit 99.1
Blackbaud, Inc. Announces First Quarter 2013 Results
Announces Second Quarter 2013 Dividend

CHARLESTON, S.C. - May 1, 2013 - Blackbaud, Inc. (NASDAQ: BLKB), the leading provider of software and services to the nonprofit sector, today announced financial results for its first quarter ended March 31, 2013.

“Our first quarter results were a solid start to 2013, as our revenue and profitability were above the high end of our guidance ranges,” stated Marc Chardon, Chief Executive Officer of Blackbaud. “There is growing awareness among non-profit organizations that they need to invest in new or upgraded fundraising software and related solutions in order to achieve their missions. We are still in the early stages of benefitting from our integrated product strategy following the acquisition of Convio, and we are encouraged by customer feedback that continues to be very positive on the direction of our company and solutions.”

First Quarter 2013 GAAP Financial Results

Blackbaud reported total revenue of $115.6 million for the first quarter of 2013, an increase of 22% compared to $94.7 million for the first quarter of 2012. GAAP income from operations and net income were $4.6 million and $2.7 million, respectively, compared with $5.3 million and $2.8 million, respectively, for the first quarter of 2012. Diluted earnings per share were $0.06 for the first quarter of 2013, consistent with $0.06 in the same period last year.

First Quarter 2013 Non-GAAP Financial Results

Total non-GAAP revenue, including $0.6 million of deferred revenue write down associated with the Convio acquisition, was $116.2 million for the first quarter of 2013, which exceeded the high-end of the company's guidance. Non-GAAP income from operations, which excludes the write-down of Convio deferred revenue, stock-based compensation expense, amortization of intangibles arising from business combinations, integration and restructuring costs, and CEO severance costs, was $20.9 million for the first quarter of 2013, up from $13.2 million in the same period last year and above the high-end of the company's guidance. Non-GAAP net income was $11.8 million for the first quarter of 2013, up from $7.8 million in the same period last year. Non-GAAP diluted earnings per share were $0.26 for the first quarter of 2013, up from $0.17 in the same period last year and above the high-end of the company's guidance.

A reconciliation between GAAP and 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 first quarter was a strong performance from a profitability perspective as we benefitted from the realization of the merger integration and cost synergy efforts that we've undertaken in recent quarters,” said Tony Boor, Chief Financial Officer of Blackbaud. “With customer demand trends remaining stable and our operational efficiency improving at a faster than expected pace, we have the opportunity to move forward more quickly with investments in core back office systems that will help our integrated organization scale from a long-term perspective. We continue to believe that executing against our operational efficiency plans can drive meaningful shareholder value with improved revenue growth over time, providing additional opportunity for value creation.”

Balance Sheet and Cash Flow

The company ended the first quarter with $8.4 million in cash, compared to $13.5 million at the end of 2012. The company generated $12.9 million in cash flow from operations during the first quarter, returned $5.5 million to stockholders by way of dividend, invested $7.1 million in capital expenditures and capitalized software and reduced its debt balance by $4.5 million.

Dividend

Blackbaud announced today that its Board of Directors has approved a second quarter 2013 dividend of $0.12 per share payable on June 14, 2013, to stockholders of record on May 28, 2013.



Conference Call Details

Blackbaud will host a conference call today, May 1, 2013, at 8:00 a.m. (Eastern Time) to discuss the company's financial results, operations and related matters. To access this call, dial 877-407-3982 (domestic) or 201-493-6780 (international). A replay of this conference call will be available through May 8, 2013, at 877-870-5176 (domestic) or 858-384-5517 (international). The replay passcode is 411126. 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

Serving the nonprofit and education sectors for 30 years, Blackbaud (NASDAQ: BLKB) combines technology and expertise to help organizations achieve their missions. Blackbaud works with more than 28,000 nonprofit customers in over 60 countries that support higher education, healthcare, human services, arts and culture, faith, the environment, independent K-12 education, animal welfare and other charitable causes. The company offers a full spectrum of cloud-based and on-premise software solutions and related services for organizations of all sizes including: fundraising, eMarketing, advocacy, constituent relationship management (CRM), payment services, analytics and vertical-specific solutions. Using Blackbaud technology, these organizations raise more than $100 billion each year. Recognized as a top company by Forbes, InformationWeek and Software Magazine and honored by Best Places to Work, Blackbaud is headquartered in Charleston, South Carolina and has operations in the United States, Australia, Canada, 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 which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding: the growing need for non-profit organizations to invest in new technology; benefits from our integrated product strategy; the positive direction of our company and solutions; customer demand trends; improvements in operational efficiency and the pace of such improvements; our ability to invest more quickly in back office systems; the ability of system investments to help our integrated organizational scale; the ability of our operational efficiency plans to drive meaningful shareholder value; improved revenue growth over time; and, such revenue growth providing value creation. These statements 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: management of integration of acquired companies and other risks associated with acquisitions; the ability to attract and retain key personnel; general economic risks; uncertainty regarding increased business and renewals from existing customers; continued success in sales growth; risks associated with successful implementation of multiple integrated software products; risks related to our leverage, 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. Blackbaud assumes no obligation and does not intend to update these forward-looking statements, except as required by law. 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 revenue, non-GAAP income from operations, non-GAAP net income, non-GAAP diluted earnings per share and non-GAAP operating margin. 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. Non-GAAP financial results discussed above exclude a write-down of Convio deferred revenue; stock-based compensation expense; costs associated with amortization of intangibles arising from business combinations; acquisition-related and integration costs; restructuring costs; and CEO severance. We use these measures and believe them useful to investors because they provide additional insight in comparing results from period to period.

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:
    
Brian Denyeau
ICR
brian.denyeau@icrinc.com
646-277-1251

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, 2013

 
December 31, 2012

Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
8,449

 
$
13,491

Donor restricted cash
26,280

 
68,177

Accounts receivable, net of allowance of $7,560 and $8,546 at March 31, 2013 and December 31, 2012, respectively
69,402

 
75,692

Prepaid expenses and other current assets
27,528

 
40,589

Deferred tax asset, current portion
17,745

 
15,799

Total current assets
149,404

 
213,748

Property and equipment, net
48,045

 
49,063

Goodwill
265,667

 
265,055

Intangible assets, net
162,525

 
168,037

Other assets
16,752

 
9,844

Total assets
$
642,393

 
$
705,747

Liabilities and stockholders’ equity
 
 
 
Current liabilities:
 
 
 
Trade accounts payable
$
9,746

 
$
13,623

Accrued expenses and other current liabilities
37,512

 
45,996

Donations payable
26,280

 
68,177

Debt, current portion
10,000

 
10,000

Deferred revenue, current portion
166,986

 
173,899

Total current liabilities
250,524

 
311,695

Long-term debt, net of current portion
201,000

 
205,500

Deferred tax liability
26,758

 
24,468

Deferred revenue, net of current portion
10,060

 
11,119

Other liabilities
4,366

 
5,281

Total liabilities
492,708

 
558,063

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, 54,883,954 and 54,859,604 shares issued at March 31, 2013 and December 31, 2012, respectively
55

 
55

Additional paid-in capital
208,853

 
203,638

Treasury stock, at cost; 9,239,829 and 9,209,371 shares at March 31, 2013 and December 31, 2012, respectively
(171,733
)
 
(170,898
)
Accumulated other comprehensive loss
(1,569
)
 
(1,973
)
Retained earnings
114,079

 
116,862

Total stockholders’ equity
149,685

 
147,684

Total liabilities and stockholders’ equity
$
642,393

 
$
705,747






Blackbaud, Inc.
Consolidated statements of comprehensive income
(Unaudited)
(in thousands, except share and per share amounts)
Three months ended March 31,
 
2013

 
2012

Revenue
 
 
 
License fees
$
2,980

 
$
7,168

Subscriptions
47,756

 
28,062

Services
28,838

 
23,958

Maintenance
34,148

 
33,566

Other revenue
1,901

 
1,952

Total revenue
115,623

 
94,706

Cost of revenue
 
 
 
Cost of license fees
725

 
613

Cost of subscriptions
20,383

 
12,974

Cost of services
25,399

 
20,042

Cost of maintenance
5,874

 
5,977

Cost of other revenue
1,197

 
1,469

Total cost of revenue
53,578

 
41,075

Gross profit
62,045

 
53,631

Operating expenses
 
 
 
Sales and marketing
24,392

 
20,377

Research and development
16,429

 
13,304

General and administrative
12,742

 
14,501

Restructuring
3,210

 

Amortization
678

 
197

Total operating expenses
57,451

 
48,379

Income from operations
4,594

 
5,252

Interest income
17

 
47

Interest expense
(1,694
)
 
(191
)
Other income (expense), net
103

 
(308
)
Income before provision for income taxes
3,020

 
4,800

Income tax provision
354

 
2,041

Net income
$
2,666

 
$
2,759

Earnings per share
 
 
 
Basic
$
0.06

 
$
0.06

Diluted
$
0.06

 
$
0.06

Common shares and equivalents outstanding
 
 
 
Basic weighted average shares
44,473,519

 
43,944,459

Diluted weighted average shares
45,009,213

 
44,613,256

Dividends per share
$
0.12

 
$
0.12

 
 
 
 
Other comprehensive income
 
 
 
Foreign currency translation adjustment
285

 
279

Unrealized gain on derivative instruments, net of tax
119

 

Total other comprehensive income
404

 
279

Comprehensive income
$
3,070

 
$
3,038




Blackbaud, Inc.
Consolidated statements of cash flows
(Unaudited)
 
Three months ended March 31,
 
(in thousands)
2013

 
2012

Cash flows from operating activities
 
 
 
Net income
$
2,666

 
$
2,759

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
10,408

 
4,816

Provision for doubtful accounts and sales returns
670

 
1,117

Stock-based compensation expense
5,178

 
3,836

Excess tax benefits from stock-based compensation

 
(310
)
Deferred taxes
(188
)
 
967

Other non-cash adjustments
353

 
(555
)
Changes in operating assets and liabilities, net of acquisition of businesses:
 
 
 
Accounts receivable
5,404

 
(1,686
)
Prepaid expenses and other assets
6,416

 
(1,754
)
Trade accounts payable
(754
)
 
1,739

Accrued expenses and other liabilities
(10,074
)
 
(5,253
)
Donor restricted cash
42,588

 
19,361

Donations payable
(42,588
)
 
(19,361
)
Deferred revenue
(7,139
)
 
(1,691
)
Net cash provided by operating activities
12,940

 
3,985

Cash flows from investing activities
 
 
 
Purchase of property and equipment
(6,292
)
 
(6,297
)
Purchase of net assets of acquired companies, net of cash acquired
(876
)
 

Capitalized software development costs
(764
)
 

Net cash used in investing activities
(7,932
)
 
(6,297
)
Cash flows from financing activities
 
 
 
Proceeds from issuance of debt
16,700

 

Payments on debt
(21,200
)
 

Payments of deferred financing costs

 
(2,440
)
Proceeds from exercise of stock options
67

 
2,959

Excess tax benefits from stock-based compensation

 
310

Dividend payments to stockholders
(5,479
)
 
(5,409
)
Net cash used in financing activities
(9,912
)
 
(4,580
)
Effect of exchange rate on cash and cash equivalents
(138
)
 
339

Net decrease in cash and cash equivalents
(5,042
)
 
(6,553
)
Cash and cash equivalents, beginning of period
13,491

 
52,520

Cash and cash equivalents, end of period
$
8,449

 
$
45,967





Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP financial measures
(Unaudited)
(in thousands, except per share amounts)
Three months ended March 31,
 
2013

 
2012

GAAP revenue
$
115,623

 
$
94,706

Non-GAAP adjustments:
 
 
 
  Add: Convio deferred revenue writedown
589

 

Total Non-GAAP adjustments
589

 

Non-GAAP revenue
$
116,212

 
$
94,706

 
 
 
 
GAAP gross profit
$
62,045

 
$
53,631

Non-GAAP adjustments:
 
 
 
  Add: Convio deferred revenue writedown
589

 

  Add: Stock-based compensation expense
1,132

 
784

  Add: Amortization of intangibles from business combinations
5,520

 
1,779

  Add: Acquisition integration costs
340

 

  Add: Restructuring costs

 

Total Non-GAAP adjustments
7,581

 
2,563

Non-GAAP gross profit
$
69,626

 
$
56,194

 
 
 
 
Non-GAAP gross margin
60
%
 
59
%
 
 
 
 
GAAP income from operations
$
4,594

 
$
5,252

Non-GAAP adjustments:
 
 
 
  Add: Convio deferred revenue writedown
589

 

  Add: Stock-based compensation expense
5,178

 
3,836

  Add: Amortization of intangibles from business combinations
6,198

 
1,976

  Add: Acquisition integration costs
833

 

  Add: Restructuring costs
3,210

 

  Add: CEO severance
327

 

  Add: Acquisition-related expenses

 
2,183

Total Non-GAAP adjustments
16,335

 
7,995

Non-GAAP income from operations
$
20,929

 
$
13,247

 
 
 
 
Non-GAAP operating margin
18
%
 
14
%
 
 
 
 
GAAP net income
$
2,666

 
$
2,759

Non-GAAP adjustments:
 
 
 
  Add: Total Non-GAAP adjustments affecting income from operations
16,335

 
7,995

  Less: Tax impact related to Non-GAAP adjustments
(7,194
)
 
(2,949
)
Non-GAAP net income
$
11,807

 
$
7,805

 
 
 
 
Shares used in computing Non-GAAP diluted earnings per share
45,009

 
44,613

Non-GAAP diluted earnings per share
$
0.26

 
$
0.17

Detail of Non-GAAP adjustments:
 
 
 
Stock-based compensation expense:
 
 
 
Cost of revenue
 
 
 
Cost of subscriptions
$
226

 
$
181

Cost of services
844

 
492

Cost of maintenance
62

 
111

Subtotal
1,132

 
784

Operating expenses
 
 
 
Sales and marketing
698

 
417

Research and development
1,152

 
651

General and administrative
2,196

 
1,984

Subtotal
4,046

 
3,052

Total stock-based compensation expense
$
5,178

 
$
3,836

 
 
 
 
Amortization of intangibles from business combinations:
 
 
 
Cost of revenue
 
 
 
Cost of license fees
$
121

 
$
123

Cost of subscriptions
4,633

 
982

Cost of services
633

 
411

Cost of maintenance
114

 
244

Cost of other revenue
19

 
19

Subtotal
5,520

 
1,779

Operating expenses
678

 
197

Total amortization of intangibles from business combinations
$
6,198

 
$
1,976