000-50600 | 11-2617163 | |
(Commission File Number) | (IRS Employer ID Number) | |
2000 Daniel Island Drive, Charleston, South Carolina | 29492 | |
(Address of principal executive offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |
99.1 | Press release dated July 31, 2013 reporting unaudited financial results for the quarter ended June 30, 2013. |
BLACKBAUD, INC. | |||||
Date: | July 31, 2013 | /s/ Anthony W. Boor | |||
Anthony W. Boor, | |||||
Senior Vice President and Chief Financial Officer |
(in thousands, except share amounts) | June 30, 2013 | December 31, 2012 | |||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 7,300 | $ | 13,491 | |||
Donor restricted cash | 27,054 | 68,177 | |||||
Accounts receivable, net of allowance of $7,542 and $8,546 at June 30, 2013 and December 31, 2012, respectively | 85,749 | 75,692 | |||||
Prepaid expenses and other current assets | 32,205 | 40,589 | |||||
Deferred tax asset, current portion | 12,973 | 15,799 | |||||
Total current assets | 165,281 | 213,748 | |||||
Property and equipment, net | 49,802 | 49,063 | |||||
Goodwill | 264,454 | 265,055 | |||||
Intangible assets, net | 155,746 | 168,037 | |||||
Other assets | 17,894 | 9,844 | |||||
Total assets | $ | 653,177 | $ | 705,747 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Trade accounts payable | $ | 5,725 | $ | 13,623 | |||
Accrued expenses and other current liabilities | 47,046 | 45,996 | |||||
Donations payable | 27,054 | 68,177 | |||||
Debt, current portion | 11,250 | 10,000 | |||||
Deferred revenue, current portion | 180,932 | 173,899 | |||||
Total current liabilities | 272,007 | 311,695 | |||||
Debt, net of current portion | 184,250 | 205,500 | |||||
Deferred tax liability | 27,291 | 24,468 | |||||
Deferred revenue, net of current portion | 10,608 | 11,119 | |||||
Other liabilities | 5,632 | 5,281 | |||||
Total liabilities | 499,788 | 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, 55,062,141 and 54,859,604 shares issued at June 30, 2013 and December 31, 2012, respectively | 55 | 55 | |||||
Additional paid-in capital | 213,707 | 203,638 | |||||
Treasury stock, at cost; 9,318,148 and 9,209,371 shares at June 30, 2013 and December 31, 2012, respectively | (174,206 | ) | (170,898 | ) | |||
Accumulated other comprehensive loss | (1,406 | ) | (1,973 | ) | |||
Retained earnings | 115,239 | 116,862 | |||||
Total stockholders’ equity | 153,389 | 147,684 | |||||
Total liabilities and stockholders’ equity | $ | 653,177 | $ | 705,747 |
(in thousands, except share and per share amounts) | Three months ended June 30, | Six months ended June 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Revenue | |||||||||||||||
License fees | $ | 5,990 | $ | 4,521 | $ | 8,970 | $ | 11,689 | |||||||
Subscriptions | 51,964 | 37,923 | 99,720 | 65,985 | |||||||||||
Services | 31,368 | 31,790 | 60,206 | 55,748 | |||||||||||
Maintenance | 34,122 | 33,880 | 68,270 | 67,446 | |||||||||||
Other revenue | 2,024 | 2,076 | 3,925 | 4,028 | |||||||||||
Total revenue | 125,468 | 110,190 | 241,091 | 204,896 | |||||||||||
Cost of revenue | |||||||||||||||
Cost of license fees | 643 | 821 | 1,368 | 1,434 | |||||||||||
Cost of subscriptions | 21,605 | 16,561 | 41,988 | 29,535 | |||||||||||
Cost of services | 26,503 | 25,299 | 51,902 | 45,341 | |||||||||||
Cost of maintenance | 6,561 | 6,178 | 12,435 | 12,155 | |||||||||||
Cost of other revenue | 1,301 | 1,646 | 2,498 | 3,115 | |||||||||||
Total cost of revenue | 56,613 | 50,505 | 110,191 | 91,580 | |||||||||||
Gross profit | 68,855 | 59,685 | 130,900 | 113,316 | |||||||||||
Operating expenses | |||||||||||||||
Sales and marketing | 24,423 | 24,223 | 48,815 | 44,600 | |||||||||||
Research and development | 16,483 | 14,856 | 32,912 | 28,160 | |||||||||||
General and administrative | 12,849 | 21,753 | 25,591 | 36,254 | |||||||||||
Restructuring | 146 | — | 3,356 | — | |||||||||||
Amortization | 636 | 530 | 1,314 | 727 | |||||||||||
Impairment of cost method investment | — | 200 | — | 200 | |||||||||||
Total operating expenses | 54,537 | 61,562 | 111,988 | 109,941 | |||||||||||
Income (loss) from operations | 14,318 | (1,877 | ) | 18,912 | 3,375 | ||||||||||
Interest income | 20 | 33 | 37 | 80 | |||||||||||
Interest expense | (1,497 | ) | (1,462 | ) | (3,191 | ) | (1,653 | ) | |||||||
Other expense, net | (309 | ) | (140 | ) | (206 | ) | (448 | ) | |||||||
Income (loss) before provision for income taxes | 12,532 | (3,446 | ) | 15,552 | 1,354 | ||||||||||
Income tax provision (benefit) | 5,909 | (1,175 | ) | 6,263 | 866 | ||||||||||
Net income (loss) | $ | 6,623 | $ | (2,271 | ) | $ | 9,289 | $ | 488 | ||||||
Earnings (loss) per share | |||||||||||||||
Basic | $ | 0.15 | $ | (0.05 | ) | $ | 0.21 | $ | 0.01 | ||||||
Diluted | $ | 0.15 | $ | (0.05 | ) | $ | 0.21 | $ | 0.01 | ||||||
Common shares and equivalents outstanding | |||||||||||||||
Basic weighted average shares | 44,538,444 | 44,112,905 | 44,506,157 | 44,023,650 | |||||||||||
Diluted weighted average shares | 45,349,666 | 44,112,905 | 45,190,158 | 44,659,678 | |||||||||||
Dividends per share | $ | 0.12 | $ | 0.12 | $ | 0.24 | $ | 0.24 | |||||||
Other comprehensive income (loss) | |||||||||||||||
Foreign currency translation adjustment | (266 | ) | (168 | ) | 19 | 111 | |||||||||
Unrealized gain (loss) on derivative instruments, net of tax | 429 | (564 | ) | 548 | (564 | ) | |||||||||
Total other comprehensive income (loss) | 163 | (732 | ) | 567 | (453 | ) | |||||||||
Comprehensive income (loss) | $ | 6,786 | $ | (3,003 | ) | $ | 9,856 | $ | 35 |
Six months ended June 30, | |||||||
(in thousands) | 2013 | 2012 | |||||
Cash flows from operating activities | |||||||
Net income | $ | 9,289 | $ | 488 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 21,135 | 12,223 | |||||
Provision for doubtful accounts and sales returns | 1,246 | 2,511 | |||||
Stock-based compensation expense | 9,895 | 9,624 | |||||
Excess tax benefits from stock-based compensation | — | (340 | ) | ||||
Deferred taxes | 4,933 | 464 | |||||
Impairment of cost method investment | — | 200 | |||||
Other non-cash adjustments | 838 | 177 | |||||
Changes in operating assets and liabilities, net of acquisition of businesses: | |||||||
Accounts receivable | (11,966 | ) | (16,135 | ) | |||
Prepaid expenses and other assets | 8,319 | (7,268 | ) | ||||
Trade accounts payable | (4,586 | ) | 643 | ||||
Accrued expenses and other liabilities | (9,731 | ) | (4,692 | ) | |||
Donor restricted cash | 41,505 | 21,868 | |||||
Donations payable | (41,505 | ) | (21,868 | ) | |||
Deferred revenue | 8,100 | 13,054 | |||||
Net cash provided by operating activities | 37,472 | 10,949 | |||||
Cash flows from investing activities | |||||||
Purchase of property and equipment | (10,068 | ) | (11,568 | ) | |||
Purchase of net assets of acquired companies, net of cash acquired | (876 | ) | (280,095 | ) | |||
Capitalized software development costs | (1,643 | ) | (235 | ) | |||
Net cash used in investing activities | (12,587 | ) | (291,898 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from issuance of debt | 27,900 | 312,000 | |||||
Payments on debt | (47,900 | ) | (52,400 | ) | |||
Payments of deferred financing costs | — | (2,440 | ) | ||||
Proceeds from exercise of stock options | 221 | 2,984 | |||||
Excess tax benefits from stock-based compensation | — | 340 | |||||
Dividend payments to stockholders | (10,959 | ) | (10,830 | ) | |||
Net cash provided by (used in) financing activities | (30,738 | ) | 249,654 | ||||
Effect of exchange rate on cash and cash equivalents | (338 | ) | (33 | ) | |||
Net decrease in cash and cash equivalents | (6,191 | ) | (31,328 | ) | |||
Cash and cash equivalents, beginning of period | 13,491 | 52,520 | |||||
Cash and cash equivalents, end of period | $ | 7,300 | $ | 21,192 |
(in thousands, except per share amounts) | Three months ended June 30, | Six months ended June 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
GAAP revenue | $ | 125,468 | $ | 110,190 | $ | 241,091 | $ | 204,896 | |||||||
Non-GAAP adjustments: | |||||||||||||||
Add: Convio deferred revenue write-down | 277 | 3,468 | 866 | 3,468 | |||||||||||
Total Non-GAAP adjustments | 277 | 3,468 | 866 | 3,468 | |||||||||||
Non-GAAP revenue | $ | 125,745 | $ | 113,658 | $ | 241,957 | $ | 208,364 | |||||||
GAAP gross profit | $ | 68,855 | $ | 59,685 | $ | 130,900 | $ | 113,316 | |||||||
Non-GAAP adjustments: | |||||||||||||||
Add: Convio deferred revenue write-down | 277 | 3,468 | 866 | 3,468 | |||||||||||
Add: Stock-based compensation expense | 976 | 899 | 2,107 | 1,683 | |||||||||||
Add: Amortization of intangibles from business combinations | 5,570 | 3,567 | 11,090 | 5,346 | |||||||||||
Add: Acquisition integration costs | 259 | — | 599 | — | |||||||||||
Add: Write-off of prepaid proprietary software licenses | — | 350 | — | 350 | |||||||||||
Total Non-GAAP adjustments | 7,082 | 8,284 | 14,662 | 10,847 | |||||||||||
Non-GAAP gross profit | $ | 75,937 | $ | 67,969 | $ | 145,562 | $ | 124,163 | |||||||
Non-GAAP gross margin | 60 | % | 60 | % | 60 | % | 60 | % | |||||||
GAAP income (loss) from operations | $ | 14,318 | $ | (1,877 | ) | $ | 18,912 | $ | 3,375 | ||||||
Non-GAAP adjustments: | |||||||||||||||
Add: Convio deferred revenue write-down | 277 | 3,468 | 866 | 3,468 | |||||||||||
Add: Stock-based compensation expense | 4,717 | 5,788 | 9,895 | 9,624 | |||||||||||
Add: Amortization of intangibles from business combinations | 6,206 | 4,097 | 12,404 | 6,073 | |||||||||||
Add: Acquisition integration costs | 412 | 3,029 | 1,246 | 3,029 | |||||||||||
Add: Restructuring costs | 146 | — | 3,356 | — | |||||||||||
Add: CEO severance | 312 | — | 639 | — | |||||||||||
Add: Acquisition-related expenses | — | 4,244 | — | 6,427 | |||||||||||
Add: Write-off of prepaid proprietary software licenses | — | 350 | — | 350 | |||||||||||
Add: Impairment of cost method investment | — | 200 | — | 200 | |||||||||||
Total Non-GAAP adjustments | 12,070 | 21,176 | 28,406 | 29,171 | |||||||||||
Non-GAAP income from operations | $ | 26,388 | $ | 19,299 | $ | 47,318 | $ | 32,546 | |||||||
Non-GAAP operating margin | 21 | % | 17 | % | 20 | % | 16 | % | |||||||
GAAP net income (loss) | $ | 6,623 | $ | (2,271 | ) | $ | 9,289 | $ | 488 | ||||||
Non-GAAP adjustments: | |||||||||||||||
Add: Total Non-GAAP adjustments affecting income (loss) from operations | 12,070 | 21,176 | 28,406 | 29,171 | |||||||||||
Less: Tax impact related to Non-GAAP adjustments | (3,684 | ) | (8,090 | ) | (10,880 | ) | (11,039 | ) | |||||||
Non-GAAP net income | $ | 15,009 | $ | 10,815 | $ | 26,815 | $ | 18,620 | |||||||
Shares used in computing Non-GAAP diluted earnings per share | 45,350 | 44,113 | 45,190 | 44,660 | |||||||||||
Non-GAAP diluted earnings per share | $ | 0.33 | $ | 0.25 | $ | 0.59 | $ | 0.42 | |||||||
Detail of Non-GAAP adjustments: | |||||||||||||||
Stock-based compensation expense: | |||||||||||||||
Cost of revenue | |||||||||||||||
Cost of subscriptions | $ | 189 | $ | 245 | $ | 415 | $ | 426 | |||||||
Cost of services | 593 | 565 | 1,436 | 1,057 | |||||||||||
Cost of maintenance | 194 | 89 | 256 | 200 | |||||||||||
Subtotal | 976 | 899 | 2,107 | 1,683 | |||||||||||
Operating expenses | |||||||||||||||
Sales and marketing | 545 | 603 | 1,243 | 1,020 | |||||||||||
Research and development | 1,062 | 847 | 2,215 | 1,498 | |||||||||||
General and administrative | 2,134 | 3,439 | 4,330 | 5,423 | |||||||||||
Subtotal | 3,741 | 4,889 | 7,788 | 7,941 | |||||||||||
Total stock-based compensation expense | $ | 4,717 | $ | 5,788 | $ | 9,895 | $ | 9,624 | |||||||
Amortization of intangibles from business combinations | |||||||||||||||
Cost of revenue | |||||||||||||||
Cost of license fees | $ | 126 | $ | 124 | $ | 247 | $ | 247 | |||||||
Cost of subscriptions | 4,678 | 2,706 | 9,312 | 3,688 | |||||||||||
Cost of services | 633 | 468 | 1,266 | 879 | |||||||||||
Cost of maintenance | 114 | 250 | 228 | 494 | |||||||||||
Cost of other revenue | 19 | 19 | 37 | 38 | |||||||||||
Subtotal | 5,570 | 3,567 | 11,090 | 5,346 | |||||||||||
Operating expenses | 636 | 530 | 1,314 | 727 | |||||||||||
Total amortization of intangibles from business combinations | $ | 6,206 | $ | 4,097 | $ | 12,404 | $ | 6,073 |