þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
![]() |
Delaware | 11-2617163 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer þ | Accelerated filer | ¨ |
Non-accelerated filer ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Second Quarter 2015 Form 10-Q | ![]() | 1 |
2 | ![]() | Second Quarter 2015 Form 10-Q |
(in thousands, except share amounts) | June 30, 2015 | December 31, 2014 | ||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 13,227 | $ | 14,735 | ||
Donor restricted cash | 61,055 | 140,709 | ||||
Accounts receivable, net of allowance of $4,433 and $4,539 at June 30, 2015 and December 31, 2014, respectively | 87,462 | 77,523 | ||||
Prepaid expenses and other current assets | 41,628 | 40,392 | ||||
Deferred tax asset, current portion | 11,967 | 14,423 | ||||
Total current assets | 215,339 | 287,782 | ||||
Property and equipment, net | 48,960 | 50,402 | ||||
Goodwill | 345,873 | 349,008 | ||||
Intangible assets, net | 212,596 | 229,307 | ||||
Other assets | 32,592 | 26,684 | ||||
Total assets | $ | 855,360 | $ | 943,183 | ||
Liabilities and stockholders’ equity | ||||||
Current liabilities: | ||||||
Trade accounts payable | $ | 18,100 | $ | 11,436 | ||
Accrued expenses and other current liabilities | 45,357 | 52,201 | ||||
Donations payable | 61,055 | 140,709 | ||||
Debt, current portion | 4,375 | 4,375 | ||||
Deferred revenue, current portion | 225,076 | 212,283 | ||||
Total current liabilities | 353,963 | 421,004 | ||||
Debt, net of current portion | 253,130 | 276,196 | ||||
Deferred tax liability | 37,469 | 43,639 | ||||
Deferred revenue, net of current portion | 8,796 | 8,991 | ||||
Other liabilities | 6,747 | 7,437 | ||||
Total liabilities | 660,105 | 757,267 | ||||
Commitments and contingencies (see Note 12) | ||||||
Stockholders’ equity: | ||||||
Preferred stock; 20,000,000 shares authorized, none outstanding | — | — | ||||
Common stock, $0.001 par value; 180,000,000 shares authorized, 56,658,529 and 56,048,135 shares issued at June 30, 2015 and December 31, 2014, respectively | 57 | 56 | ||||
Additional paid-in capital | 257,996 | 245,674 | ||||
Treasury stock, at cost; 9,790,192 and 9,740,054 shares at June 30, 2015 and December 31, 2014, respectively | (192,665 | ) | (190,440 | ) | ||
Accumulated other comprehensive loss | (1,926 | ) | (1,032 | ) | ||
Retained earnings | 131,793 | 131,658 | ||||
Total stockholders’ equity | 195,255 | 185,916 | ||||
Total liabilities and stockholders’ equity | $ | 855,360 | $ | 943,183 | ||
The accompanying notes are an integral part of these consolidated financial statements. |
Second Quarter 2015 Form 10-Q | ![]() | 3 |
(in thousands, except share and per share amounts) | Three months ended June 30, | Six months ended June 30, | |||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
Revenue | |||||||||||||
Subscriptions | $ | 80,009 | $ | 64,985 | $ | 152,522 | $ | 123,253 | |||||
Maintenance | 38,627 | 36,527 | 77,523 | 72,179 | |||||||||
Services | 33,667 | 31,795 | 64,973 | 59,925 | |||||||||
License fees and other | 3,956 | 6,081 | 8,234 | 11,653 | |||||||||
Total revenue | 156,259 | 139,388 | 303,252 | 267,010 | |||||||||
Cost of revenue | |||||||||||||
Cost of subscriptions | 39,400 | 31,749 | 75,578 | 61,873 | |||||||||
Cost of maintenance | 6,969 | 5,983 | 14,471 | 11,397 | |||||||||
Cost of services | 25,915 | 25,540 | 52,886 | 51,803 | |||||||||
Cost of license fees and other | 1,146 | 1,424 | 2,307 | 2,953 | |||||||||
Total cost of revenue | 73,430 | 64,696 | 145,242 | 128,026 | |||||||||
Gross profit | 82,829 | 74,692 | 158,010 | 138,984 | |||||||||
Operating expenses | |||||||||||||
Sales and marketing | 29,723 | 26,433 | 58,285 | 51,549 | |||||||||
Research and development | 20,166 | 18,064 | 41,442 | 34,558 | |||||||||
General and administrative | 17,955 | 13,781 | 34,798 | 26,599 | |||||||||
Amortization | 524 | 418 | 1,012 | 1,005 | |||||||||
Total operating expenses | 68,368 | 58,696 | 135,537 | 113,711 | |||||||||
Income from operations | 14,461 | 15,996 | 22,473 | 25,273 | |||||||||
Interest income | 7 | 13 | 15 | 29 | |||||||||
Interest expense | (1,873 | ) | (1,328 | ) | (3,559 | ) | (2,787 | ) | |||||
Loss on sale of business | (1,976 | ) | — | (1,976 | ) | — | |||||||
Loss on debt extinguishment and termination of derivative instruments (see Notes 10 and 11) | — | — | — | (996 | ) | ||||||||
Other income (expense), net | 695 | 225 | 400 | (11 | ) | ||||||||
Income before provision for income taxes | 11,314 | 14,906 | 17,353 | 21,508 | |||||||||
Income tax provision | 4,272 | 5,626 | 6,026 | 8,414 | |||||||||
Net income | $ | 7,042 | $ | 9,280 | $ | 11,327 | $ | 13,094 | |||||
Earnings per share | |||||||||||||
Basic | $ | 0.15 | $ | 0.21 | $ | 0.25 | $ | 0.29 | |||||
Diluted | $ | 0.15 | $ | 0.20 | $ | 0.24 | $ | 0.29 | |||||
Common shares and equivalents outstanding | |||||||||||||
Basic weighted average shares | 45,579,345 | 45,155,955 | 45,554,645 | 45,141,878 | |||||||||
Diluted weighted average shares | 46,402,707 | 45,660,910 | 46,289,440 | 45,607,106 | |||||||||
Dividends per share | $ | 0.12 | $ | 0.12 | $ | 0.24 | $ | 0.24 | |||||
Other comprehensive (loss) income | |||||||||||||
Foreign currency translation adjustment | (196 | ) | (385 | ) | (522 | ) | 170 | ||||||
Unrealized gain (loss) on derivative instruments, net of tax | 97 | (394 | ) | (372 | ) | (82 | ) | ||||||
Total other comprehensive (loss) income | (99 | ) | (779 | ) | (894 | ) | 88 | ||||||
Comprehensive income | $ | 6,943 | $ | 8,501 | $ | 10,433 | $ | 13,182 | |||||
The accompanying notes are an integral part of these consolidated financial statements. |
4 | ![]() | Second Quarter 2015 Form 10-Q |
Six months ended June 30, | ||||||
(in thousands) | 2015 | 2014 | ||||
Cash flows from operating activities | ||||||
Net income | $ | 11,327 | $ | 13,094 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 27,272 | 21,194 | ||||
Provision for doubtful accounts and sales returns | 2,934 | 2,966 | ||||
Stock-based compensation expense | 11,413 | 8,044 | ||||
Excess tax benefits from exercise and vesting of stock-based compensation | (954 | ) | (2,067 | ) | ||
Deferred taxes | (801 | ) | 1,757 | |||
Loss on sale of business | 1,976 | — | ||||
Impairment of capitalized software development costs | — | 770 | ||||
Loss on debt extinguishment and termination of derivative instruments | — | 996 | ||||
Amortization of deferred financing costs and discount | 420 | 343 | ||||
Other non-cash adjustments | 289 | 1,488 | ||||
Changes in operating assets and liabilities, net of acquisition of businesses: | ||||||
Accounts receivable | (13,355 | ) | (15,096 | ) | ||
Prepaid expenses and other assets | (2,102 | ) | 2,941 | |||
Trade accounts payable | 5,235 | (1,333 | ) | |||
Accrued expenses and other liabilities | (9,882 | ) | 4,419 | |||
Donor restricted cash | 78,718 | 62,609 | ||||
Donations payable | (78,718 | ) | (62,609 | ) | ||
Deferred revenue | 13,792 | 5,588 | ||||
Net cash provided by operating activities | 47,564 | 45,104 | ||||
Cash flows from investing activities | ||||||
Purchase of property and equipment | (7,014 | ) | (5,423 | ) | ||
Capitalized software development costs | (6,982 | ) | (3,831 | ) | ||
Purchase of net assets of acquired companies, net of cash acquired | — | (32,762 | ) | |||
Net cash used in sale of business | (521 | ) | — | |||
Net cash used in investing activities | (14,517 | ) | (42,016 | ) | ||
Cash flows from financing activities | ||||||
Proceeds from issuance of debt | 70,100 | 201,000 | ||||
Payments on debt | (93,388 | ) | (180,002 | ) | ||
Debt issuance costs | — | (2,484 | ) | |||
Proceeds from exercise of stock options | 18 | 107 | ||||
Excess tax benefits from exercise and vesting of stock-based compensation | 954 | 2,067 | ||||
Dividend payments to stockholders | (11,255 | ) | (11,081 | ) | ||
Net cash (used in) provided by financing activities | (33,571 | ) | 9,607 | |||
Effect of exchange rate on cash and cash equivalents | (984 | ) | 263 | |||
Net (decrease) increase in cash and cash equivalents | (1,508 | ) | 12,958 | |||
Cash and cash equivalents, beginning of period | 14,735 | 11,889 | ||||
Cash and cash equivalents, end of period | $ | 13,227 | $ | 24,847 | ||
The accompanying notes are an integral part of these consolidated financial statements. |
Second Quarter 2015 Form 10-Q | ![]() | 5 |
(in thousands, except share amounts) | Common stock | Additional paid-in capital | Treasury stock | Accumulated other comprehensive loss | Retained earnings | Total stockholders' equity | ||||||||||||||
Shares | Amount | |||||||||||||||||||
Balance at December 31, 2013 | 55,699,817 | $ | 56 | $ | 220,763 | $ | (183,288 | ) | $ | (1,385 | ) | $ | 125,398 | $ | 161,544 | |||||
Net income | — | — | — | — | — | 28,290 | 28,290 | |||||||||||||
Payment of dividends | — | — | — | — | — | (22,107 | ) | (22,107 | ) | |||||||||||
Exercise of stock options and stock appreciation rights and vesting of restricted stock units | 186,473 | — | 188 | — | — | — | 188 | |||||||||||||
Surrender of 166,952 shares upon vesting of restricted stock and restricted stock units and exercise of stock appreciation rights | — | — | — | (7,152 | ) | — | — | (7,152 | ) | |||||||||||
Excess tax benefits from exercise and vesting of stock-based compensation | — | — | 7,455 | — | — | — | 7,455 | |||||||||||||
Stock-based compensation | — | — | 17,268 | — | — | 77 | 17,345 | |||||||||||||
Restricted stock grants | 248,567 | — | — | — | — | — | — | |||||||||||||
Restricted stock cancellations | (86,722 | ) | — | — | — | — | — | — | ||||||||||||
Other comprehensive income (loss) | — | — | — | — | 353 | — | 353 | |||||||||||||
Balance at December 31, 2014 | 56,048,135 | $ | 56 | $ | 245,674 | $ | (190,440 | ) | $ | (1,032 | ) | $ | 131,658 | $ | 185,916 | |||||
Net income | — | — | — | — | — | 11,327 | 11,327 | |||||||||||||
Payment of dividends | — | — | — | — | — | (11,255 | ) | (11,255 | ) | |||||||||||
Exercise of stock options and stock appreciation rights and vesting of restricted stock units | 112,153 | — | 18 | — | — | — | 18 | |||||||||||||
Surrender of 47,975 shares upon vesting of restricted stock and restricted stock units and exercise of stock appreciation rights | — | — | — | (2,225 | ) | — | — | (2,225 | ) | |||||||||||
Excess tax benefits from exercise and vesting of stock-based compensation | — | — | 954 | — | — | — | 954 | |||||||||||||
Stock-based compensation | — | — | 11,350 | — | — | 63 | 11,413 | |||||||||||||
Restricted stock grants | 568,001 | 1 | — | — | — | — | 1 | |||||||||||||
Restricted stock cancellations | (69,760 | ) | — | — | — | — | — | — | ||||||||||||
Other comprehensive income (loss) | — | — | — | — | (894 | ) | — | (894 | ) | |||||||||||
Balance at June 30, 2015 | 56,658,529 | $ | 57 | $ | 257,996 | $ | (192,665 | ) | $ | (1,926 | ) | $ | 131,793 | $ | 195,255 | |||||
The accompanying notes are an integral part of these consolidated financial statements. |
6 | ![]() | Second Quarter 2015 Form 10-Q |
Second Quarter 2015 Form 10-Q | ![]() | 7 |
8 | ![]() | Second Quarter 2015 Form 10-Q |
Second Quarter 2015 Form 10-Q | ![]() | 9 |
• | Level 1 - Quoted prices for identical assets or liabilities in active markets; |
• | Level 2 - Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and |
• | Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable. |
10 | ![]() | Second Quarter 2015 Form 10-Q |
Second Quarter 2015 Form 10-Q | ![]() | 11 |
(in thousands) | |||
Net working capital, excluding deferred revenue | $ | 9,442 | |
Property and equipment | 1,371 | ||
Other long term assets | 992 | ||
Deferred revenue | (11,670 | ) | |
Deferred tax liability | (4,509 | ) | |
Intangible assets and liabilities | 90,200 | ||
Goodwill | 73,960 | ||
Total purchase price | $ | 159,786 |
12 | ![]() | Second Quarter 2015 Form 10-Q |
Intangible assets acquired | Weighted average amortization period | |||
MicroEdge | (in thousands) | (in years) | ||
Customer relationships | $ | 61,200 | 13 | |
Marketing assets | 2,500 | 7 | ||
Marketing assets | 1,600 | Indefinite | ||
Acquired technology | 24,300 | 7 | ||
Non-compete agreements | 600 | 3 | ||
Total intangible assets | $ | 90,200 | 11 |
Three months ended June 30, | Six months ended June 30, | |||||
(in thousands, except per share amounts) | 2014 | 2014 | ||||
Revenue | $ | 145,283 | $ | 277,590 | ||
Net income | 7,627 | 9,503 | ||||
Basic earnings per share | $ | 0.17 | $ | 0.21 | ||
Diluted earnings per share | $ | 0.17 | $ | 0.21 |
Second Quarter 2015 Form 10-Q | ![]() | 13 |
Intangible assets acquired | Weighted average amortization period | |||
WhippleHill | (in thousands) | (in years) | ||
Customer relationships | $ | 11,300 | 11 | |
Acquired technology | 8,500 | 7 | ||
Marketing assets | 2,300 | 9 | ||
Non-compete agreements | 100 | 3 | ||
Total intangible assets | $ | 22,200 | 9 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||
(in thousands, except share and per share amounts) | 2015 | 2014 | 2015 | 2014 | |||||||||
Numerator: | |||||||||||||
Net income | $ | 7,042 | $ | 9,280 | $ | 11,327 | $ | 13,094 | |||||
Denominator: | |||||||||||||
Weighted average common shares | 45,579,345 | 45,155,955 | 45,554,645 | 45,141,878 | |||||||||
Add effect of dilutive securities: | |||||||||||||
Stock-based compensation | 823,362 | 504,955 | 734,795 | 465,228 | |||||||||
Weighted average common shares assuming dilution | 46,402,707 | 45,660,910 | 46,289,440 | 45,607,106 | |||||||||
Earnings per share: | |||||||||||||
Basic | $ | 0.15 | $ | 0.21 | $ | 0.25 | $ | 0.29 | |||||
Diluted | $ | 0.15 | $ | 0.20 | $ | 0.24 | $ | 0.29 |
14 | ![]() | Second Quarter 2015 Form 10-Q |
Three months ended June 30, | Six months ended June 30, | ||||||||
2015 | 2014 | 2015 | 2014 | ||||||
Shares excluded from calculations of diluted earnings per share | 12,705 | 330,095 | 10,152 | 336,745 |
Fair value measurement using | |||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Fair value as of June 30, 2015 | |||||||||||||||
Financial liabilities: | |||||||||||||||
Derivative instruments(1) | $ | — | $ | 873 | $ | — | $ | 873 | |||||||
Total financial liabilities | $ | — | $ | 873 | $ | — | $ | 873 | |||||||
Fair value as of December 31, 2014 | |||||||||||||||
Financial liabilities: | |||||||||||||||
Derivative instruments(1) | $ | — | $ | 268 | $ | — | $ | 268 | |||||||
Total financial liabilities | $ | — | $ | 268 | $ | — | $ | 268 |
(1) | The fair value of our interest rate swaps was based on model-driven valuations using LIBOR rates, which are observable at commonly quoted intervals. Accordingly, our interest rate swaps are classified within Level 2 of the fair value hierarchy. |
Second Quarter 2015 Form 10-Q | ![]() | 15 |
(in thousands) | ECBU | GMBU | IBU | Other(1) | Total | ||||||||||
Balance at December 31, 2014 | $ | 240,621 | $ | 99,806 | $ | 6,485 | $ | 2,096 | $ | 349,008 | |||||
Adjustments related to prior year business combinations(2) | (1,581 | ) | — | — | — | (1,581 | ) | ||||||||
Adjustments related to dispositions(3) | — | — | (1,153 | ) | — | (1,153 | ) | ||||||||
Effect of foreign currency translation(4) | — | — | (401 | ) | — | (401 | ) | ||||||||
Balance at June 30, 2015 | $ | 239,040 | $ | 99,806 | $ | 4,931 | $ | 2,096 | $ | 345,873 |
(1) | Other includes goodwill not assigned to one of our three reportable segments. |
(2) | See Note 3 to these consolidated financial statements for details of the adjustments related to business combinations. |
(3) | See Note 17 to these consolidated financial statements for a summary of the disposition. |
(4) | Includes an insignificant reduction in goodwill related to the disposition discussed in (3) above. |
16 | ![]() | Second Quarter 2015 Form 10-Q |
Three months ended June 30, | Six months ended June 30, | ||||||||||||
(in thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||
Included in cost of revenue: | |||||||||||||
Cost of subscriptions | $ | 5,767 | $ | 4,434 | $ | 11,539 | $ | 8,994 | |||||
Cost of maintenance | 1,006 | 115 | 2,159 | 230 | |||||||||
Cost of services | 702 | 676 | 1,309 | 1,332 | |||||||||
Cost of license fees and other | 92 | 105 | 199 | 211 | |||||||||
Total included in cost of revenue | 7,567 | 5,330 | 15,206 | 10,767 | |||||||||
Included in operating expenses | 524 | 418 | 1,012 | 1,005 | |||||||||
Total amortization of intangibles from business combinations | $ | 8,091 | $ | 5,748 | $ | 16,218 | $ | 11,772 |
Year ending December 31, | Amortization | ||
(in thousands) | expense | ||
2015 - remaining | $ | 16,115 | |
2016 | 34,819 | ||
2017 | 32,267 | ||
2018 | 30,167 | ||
2019 | 27,114 | ||
Total | $ | 140,482 |
(in thousands) | June 30, 2015 | December 31, 2014 | ||||
Deferred sales commissions | $ | 26,795 | $ | 22,630 | ||
Software development costs, net | 14,135 | 8,914 | ||||
Prepaid software maintenance | 12,971 | 9,480 | ||||
Deferred professional services costs | 4,702 | 5,753 | ||||
Taxes, prepaid and receivable | 2,755 | 8,991 | ||||
Prepaid royalties | 2,075 | 3,192 | ||||
Other assets | 10,787 | 8,116 | ||||
Total prepaid expenses and other assets | 74,220 | 67,076 | ||||
Less: Long-term portion | 32,592 | 26,684 | ||||
Prepaid expenses and other current assets | $ | 41,628 | $ | 40,392 |
Second Quarter 2015 Form 10-Q | ![]() | 17 |
(in thousands) | June 30, 2015 | December 31, 2014 | ||||
Accrued bonuses | $ | 15,242 | $ | 19,480 | ||
Accrued commissions and salaries | 7,323 | 8,712 | ||||
Taxes payable | 4,103 | 4,285 | ||||
Deferred rent liabilities | 4,023 | 4,200 | ||||
Lease incentive obligations | 3,815 | 4,099 | ||||
Unrecognized tax benefit | 2,836 | 3,791 | ||||
Customer credit balances | 2,510 | 2,573 | ||||
Accrued health care costs | 2,281 | 2,707 | ||||
Other liabilities | 9,971 | 9,791 | ||||
Total accrued expenses and other liabilities | 52,104 | 59,638 | ||||
Less: Long-term portion | 6,747 | 7,437 | ||||
Accrued expenses and other current liabilities | $ | 45,357 | $ | 52,201 |
(in thousands) | June 30, 2015 | December 31, 2014 | ||||
Subscriptions | $ | 106,988 | $ | 98,225 | ||
Maintenance | 93,467 | 92,823 | ||||
Services | 31,386 | 29,457 | ||||
License fees and other | 2,031 | 769 | ||||
Total deferred revenue | 233,872 | 221,274 | ||||
Less: Long-term portion | 8,796 | 8,991 | ||||
Deferred revenue, current portion | $ | 225,076 | $ | 212,283 |
Debt balance at | Weighted average effective interest rate at | ||||||||||
(in thousands, except percentages) | June 30, 2015 | December 31, 2014 | June 30, 2015 | December 31, 2014 | |||||||
Credit facility: | |||||||||||
Revolving credit loans | $ | 89,600 | $ | 110,700 | 2.32 | % | 1.56 | % | |||
Term loans | 169,531 | 171,719 | 2.42 | % | 2.03 | % | |||||
Total debt | 259,131 | 282,419 | 2.39 | % | 1.85 | % | |||||
Less: Unamortized debt discount | 1,626 | 1,848 | |||||||||
Less: Debt, current portion | 4,375 | 4,375 | 1.79 | % | 1.39 | % | |||||
Debt, net of current portion | $ | 253,130 | $ | 276,196 | 2.40 | % | 1.85 | % |
18 | ![]() | Second Quarter 2015 Form 10-Q |
Second Quarter 2015 Form 10-Q | ![]() | 19 |
Year ending December 31, (in thousands) | Annual maturities | ||
2015 - remaining | $ | 2,188 | |
2016 | 4,375 | ||
2017 | 4,375 | ||
2018 | 4,375 | ||
2019 | 243,818 | ||
Thereafter | — | ||
Total required maturities | $ | 259,131 |
(in thousands) | Balance sheet location | June 30, 2015 | December 31, 2014 | ||||
Derivative instruments designated as hedging instruments: | |||||||
Interest rate swaps, current portion | Accrued expenses and other current liabilities | $ | 96 | $ | — | ||
Interest rate swaps, long-term portion | Other liabilities | 777 | 268 | ||||
Total derivative instruments designated as hedging instruments | $ | 873 | $ | 268 |
20 | ![]() | Second Quarter 2015 Form 10-Q |
Gain (loss) recognized in accumulated other comprehensive loss as of | Location of gain (loss) reclassified from accumulated other comprehensive loss into income | Gain (loss) reclassified from accumulated other comprehensive loss into income | |||||||||
June 30, 2015 | Three months ended June 30, | Six months ended June 30, | |||||||||
(in thousands) | 2015 | 2015 | |||||||||
Interest rate swaps | $ | (873 | ) | Interest expense | $ | (374 | ) | $ | (749 | ) | |
June 30, 2014 | Three months ended June 30, | Six months ended June 30, | |||||||||
2014 | 2014 | ||||||||||
Interest rate swaps | $ | (553 | ) | Interest expense | $ | (316 | ) | $ | (530 | ) | |
Interest rate swaps | — | Loss on debt extinguishment and termination of derivative instruments | — | (587 | ) | ||||||
Total | $ | (553 | ) | $ | (316 | ) | $ | (1,117 | ) |
Second Quarter 2015 Form 10-Q | ![]() | 21 |
Year ending December 31, | Operating | ||
(in thousands) | leases | ||
2015 – remaining | $ | 6,095 | |
2016 | 11,691 | ||
2017 | 10,888 | ||
2018 | 11,156 | ||
2019 | 10,507 | ||
Thereafter | 33,911 | ||
Total minimum lease payments | $ | 84,248 |
22 | ![]() | Second Quarter 2015 Form 10-Q |
Three months ended June 30, | Six months ended June 30, | ||||||||
2015 | 2014 | 2015 | 2014 | ||||||
Effective tax rate | 37.8 | % | 37.7 | % | 34.7 | % | 39.1 | % |
Three months ended June 30, | Six months ended June 30, | ||||||||||||
(in thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||
Included in cost of revenue: | |||||||||||||
Cost of subscriptions | $ | 325 | $ | 175 | $ | 468 | $ | 364 | |||||
Cost of maintenance | 85 | 196 | 246 | 341 | |||||||||
Cost of services | 639 | 582 | 1,236 | 1,124 | |||||||||
Total included in cost of revenue | 1,049 | 953 | 1,950 | 1,829 | |||||||||
Included in operating expenses: | |||||||||||||
Sales and marketing | 804 | 588 | 1,506 | 1,059 | |||||||||
Research and development | 1,186 | 762 | 2,164 | 1,424 | |||||||||
General and administrative | 3,272 | 2,027 | 5,793 | 3,732 | |||||||||
Total included in operating expenses | 5,262 | 3,377 | 9,463 | 6,215 | |||||||||
Total stock-based compensation expense | $ | 6,311 | $ | 4,330 | $ | 11,413 | $ | 8,044 |
Second Quarter 2015 Form 10-Q | ![]() | 23 |
Declaration Date | Dividend per Share | Record Date | Payable Date | |||
February 2015 | $ | 0.12 | February 27 | March 13 | ||
April 2015 | $ | 0.12 | May 28 | June 15 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||
(in thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||
Accumulated other comprehensive loss, beginning of period | $ | (1,827 | ) | $ | (518 | ) | $ | (1,032 | ) | $ | (1,385 | ) | |
By component: | |||||||||||||
Gains and losses on cash flow hedges: | |||||||||||||
Accumulated other comprehensive (loss) income balance, beginning of period | $ | (633 | ) | $ | 56 | $ | (164 | ) | $ | (256 | ) | ||
Other comprehensive loss before reclassifications, net of tax effects of $83, $375, $522 and $488 | (133 | ) | (586 | ) | (831 | ) | (755 | ) | |||||
Amounts reclassified from accumulated other comprehensive loss to interest expense | 374 | 316 | 749 | 530 | |||||||||
Amounts reclassified from accumulated other comprehensive loss to loss on debt extinguishment and termination of derivative instruments | — | — | — | 587 | |||||||||
Tax benefit included in provision for income taxes | (144 | ) | (124 | ) | (290 | ) | (444 | ) | |||||
Total amounts reclassified from accumulated other comprehensive loss | 230 | 192 | 459 | 673 | |||||||||
Net current-period other comprehensive income (loss) | 97 | (394 | ) | (372 | ) | (82 | ) | ||||||
Accumulated other comprehensive loss balance, end of period | $ | (536 | ) | $ | (338 | ) | $ | (536 | ) | $ | (338 | ) | |
Foreign currency translation adjustment: | |||||||||||||
Accumulated other comprehensive loss balance, beginning of period | $ | (1,194 | ) | $ | (574 | ) | $ | (868 | ) | $ | (1,129 | ) | |
Translation adjustments | (196 | ) | (385 | ) | (522 | ) | 170 | ||||||
Accumulated other comprehensive loss balance, end of period | (1,390 | ) | (959 | ) | (1,390 | ) | (959 | ) | |||||
Accumulated other comprehensive loss, end of period | $ | (1,926 | ) | $ | (1,297 | ) | $ | (1,926 | ) | $ | (1,297 | ) |
24 | ![]() | Second Quarter 2015 Form 10-Q |
• | The ECBU is focused on marketing, sales, delivery and support to all large and/or strategic prospects and customers in North America; |
• | The GMBU is focused on marketing, sales, delivery and support to all emerging and mid-sized prospects and customers in North America; and |
• | The IBU is focused on marketing, sales, delivery and support to all prospects and customers outside of North America. |
Second Quarter 2015 Form 10-Q | ![]() | 25 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||
(in thousands) | 2015 | 2014 | 2015 | 2014 | |||||||||
Revenue by segment: | |||||||||||||
ECBU | $ | 69,385 | $ | 60,143 | $ | 136,299 | $ | 115,968 | |||||
GMBU | 76,138 | 67,029 | 146,067 | 128,159 | |||||||||
IBU | 10,687 | 12,178 | 20,814 | 22,820 | |||||||||
Other(1) | 49 | 38 | 72 | 63 | |||||||||
Total revenue | $ | 156,259 | $ | 139,388 | $ | 303,252 | $ | 267,010 | |||||
Segment operating income(2): | |||||||||||||
ECBU | $ | 33,750 | $ | 31,305 | $ | 65,954 | $ | 58,332 | |||||
GMBU | 39,338 | 35,780 | 74,001 | 68,525 | |||||||||
IBU | 2,091 | 731 | 3,392 | 1,781 | |||||||||
Other(1) | 255 | 555 | (57 | ) | 787 | ||||||||
75,434 | 68,371 | 143,290 | 129,425 | ||||||||||
Less: | |||||||||||||
Corporate unallocated costs(3) | (46,571 | ) | (42,297 | ) | (93,186 | ) | (84,336 | ) | |||||
Stock based compensation costs | (6,311 | ) | (4,330 | ) | (11,413 | ) | (8,044 | ) | |||||
Amortization expense | (8,091 | ) | (5,748 | ) | (16,218 | ) | (11,772 | ) | |||||
Interest expense, net | (1,866 | ) | (1,315 | ) | (3,544 | ) | (2,758 | ) | |||||
Loss on sale of business | (1,976 | ) | — | (1,976 | ) | — | |||||||
Loss on debt extinguishment and termination of derivative instruments | — | — | — | (996 | ) | ||||||||
Other income (expense), net | 695 | 225 | 400 | (11 | ) | ||||||||
Income before provision for income taxes | $ | 11,314 | $ | 14,906 | $ | 17,353 | $ | 21,508 |
(1) | Other includes revenue and the related costs from the sale of solutions and services not directly attributable to a reportable segment. |
(2) | Segment operating income includes direct, controllable costs related to the sale of solutions and services by the reportable segment. |
(3) | Corporate unallocated costs include research and development, depreciation expense, and certain corporate sales, marketing, general and administrative expenses. |
26 | ![]() | Second Quarter 2015 Form 10-Q |
(in thousands) | June 30, 2015 | ||
Cash and cash equivalents | $ | 952 | |
Accounts receivable, net of allowance | 132 | ||
Prepaid expenses and other assets | 38 | ||
Property and equipment, net | 31 | ||
Deferred tax asset | 6 | ||
Goodwill | 1,374 | ||
Intangible assets, net | 289 | ||
Total assets held-for-sale | $ | 2,822 | |
Trade accounts payable | $ | 82 | |
Accrued expenses and other liabilities | 181 | ||
Deferred revenue | 490 | ||
Deferred tax liability | 90 | ||
Total liabilities held-for-sale | $ | 843 |
Second Quarter 2015 Form 10-Q | ![]() | 27 |
1. | Accelerate organic revenue growth; |
2. | Accelerate our solution portfolio's move to the cloud; |
3. | Expand our total addressable market; |
4. | Optimize our back-office infrastructure; and |
5. | Implement a margin improvement plan. |
28 | ![]() | Second Quarter 2015 Form 10-Q |
Second Quarter 2015 Form 10-Q | ![]() | 29 |
Revenue by segment | |||||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||
(in millions, except percentages) | 2015 | 2014 | $ Change | % Change | 2015 | 2014 | $ Change | % Change | |||||||||||||||||
ECBU | $ | 69.4 | (1) | $ | 60.1 | $ | 9.3 | 15 | % | $ | 136.3 | (1) | $ | 116.0 | $ | 20.3 | 18 | % | |||||||
GMBU | 76.1 | 67.0 | 9.1 | 14 | % | 146.1 | 128.2 | 17.9 | 14 | % | |||||||||||||||
IBU | 10.7 | 12.2 | (1.5 | ) | (12 | )% | 20.8 | 22.8 | (2.0 | ) | (9 | )% | |||||||||||||
Other | — | — | — | — | % | 0.1 | 0.1 | — | — | % | |||||||||||||||
Total revenue(2) | $ | 156.3 | $ | 139.4 | $ | 16.9 | 12 | % | $ | 303.3 | $ | 267.0 | $ | 36.3 | 14 | % |
(1) | Included in ECBU revenue for the three and six months ended June 30, 2015 was $7.4 million and $14.0 million, respectively, attributable to the inclusion of MicroEdge. |
(2) | The individual amounts for each year may not sum to total revenue due to rounding. |
ECBU | |||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(in millions, except percentages) | 2015 | 2014 | $ Change | % Change | 2015 | 2014 | $ Change | % Change | |||||||||||||||
ECBU revenue | $ | 69.4 | $ | 60.1 | $ | 9.3 | 15 | % | $ | 136.3 | $ | 116.0 | $ | 20.3 | 18 | % | |||||||
% of total revenue | 44 | % | 43 | % | 45 | % | 43 | % |
(1) | Included in ECBU revenue for the three and six months ended June 30, 2015 was $7.4 million and $14.0 million, respectively, attributable to the inclusion of MicroEdge. |
30 | ![]() | Second Quarter 2015 Form 10-Q |
GMBU | |||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(in millions, except percentages) | 2015 | 2014 | $ Change | % Change | 2015 | 2014 | $ Change | % Change | |||||||||||||||
GMBU revenue | $ | 76.1 | $ | 67.0 | $ | 9.1 | 14 | % | $ | 146.1 | $ | 128.2 | $ | 17.9 | 14 | % | |||||||
% of total revenue | 49 | % | 48 | % | 48 | % | 48 | % |
IBU | |||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(in millions, except percentages) | 2015 | 2014 | $ Change | % Change | 2015 | 2014 | $ Change | % Change | |||||||||||||||
IBU revenue | $ | 10.7 | $ | 12.2 | $ | (1.5 | ) | (12 | )% | $ | 20.8 | $ | 22.8 | $ | (2.0 | ) | (9 | )% | |||||
% of total revenue | 7 | % | 9 | % | 7 | % | 9 | % |
Second Quarter 2015 Form 10-Q | ![]() | 31 |
Subscriptions | |||||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||
(in millions, except percentages) | 2015 | 2014 | $ Change | % Change | 2015 | 2014 | $ Change | % Change | |||||||||||||||||
Subscriptions revenue | $ | 80.0 | (1) | $ | 65.0 | $ | 15.0 | 23 | % | $ | 152.5 | (1) | $ | 123.3 | $ | 29.2 | 24 | % | |||||||
Cost of subscriptions | 39.4 | 31.7 | 7.7 | 24 | % | 75.6 | 61.9 | 13.7 | 22 | % | |||||||||||||||
Subscriptions gross profit | $ | 40.6 | $ | 33.3 | $ | 7.3 | 22 | % | $ | 76.9 | $ | 61.4 | $ | 15.5 | 25 | % | |||||||||
Subscriptions gross margin | 51 | % | 51 | % | 50 | % | 50 | % |
(1) | Included in subscriptions revenue for the three and six months ended June 30, 2015 was $4.2 million and $7.9 million, respectively, attributable to the inclusion of MicroEdge. |
32 | ![]() | Second Quarter 2015 Form 10-Q |
Maintenance | |||||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||
(in millions, except percentages) | 2015 | 2014 | $ Change | % Change | 2015 | 2014 | $ Change | % Change | |||||||||||||||||
Maintenance revenue | $ | 38.6 | (1) | $ | 36.5 | $ | 2.1 | 6 | % | $ | 77.5 | (1) | $ | 72.2 | $ | 5.3 | 7 | % | |||||||
Cost of maintenance | 7.0 | 6.0 | 1.0 | 17 | % | 14.5 | 11.4 | 3.1 | 27 | % | |||||||||||||||
Maintenance gross profit | $ | 31.6 | $ | 30.5 | $ | 1.1 | 4 | % | $ | 63.0 | $ | 60.8 | $ | 2.2 | 4 | % | |||||||||
Maintenance gross margin | 82 | % | 84 | % | 81 | % | 84 | % |
(1) | Included in maintenance revenue for the three and six months ended June 30, 2015 was $2.6 million and $4.9 million, respectively, attributable to the inclusion of MicroEdge. |
Second Quarter 2015 Form 10-Q | ![]() | 33 |
Services | |||||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||||
(in millions, except percentages) | 2015 | 2014 | $ Change | % Change | 2015 | 2014 | $ Change | % Change | |||||||||||||||||
Services revenue | $ | 33.7 | (1) | $ | 31.8 | $ | 1.9 | 6 | % | $ | 65.0 | (2) | $ | 59.9 | $ | 5.1 | 9 | % | |||||||
Cost of services | 25.9 | 25.5 | 0.4 | 2 | % | 52.9 | 51.8 | 1.1 | 2 | % | |||||||||||||||
Services gross profit | $ | 7.8 | $ | 6.3 | $ | 1.5 | 24 | % | $ | 12.1 | $ | 8.1 | $ | 4.0 | 49 | % | |||||||||
Services gross margin | 23 | % | 20 | % | 19 | % | 14 | % |
(1) | The impact on services revenue for the three months ended June 30, 2015 as a result of the inclusion of MicroEdge was not significant. |
(2) | Included in services revenue for the six months ended June 30, 2015 was $0.8 million attributable to the inclusion of MicroEdge. |
34 | ![]() | Second Quarter 2015 Form 10-Q |
License fees and other | |||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(in millions, except percentages) | 2015 | 2014 | $ Change | % Change | 2015 | 2014 | $ Change | % Change | |||||||||||||||
License fees and other revenue | $ | 4.0 | $ | 6.1 | $ | (2.1 | ) | (34 | )% | $ | 8.2 | $ | 11.7 | $ | (3.5 | ) | (30 | )% | |||||
Cost of license fees and other | 1.1 | 1.4 | (0.3 | ) | (21 | )% | 2.3 | 3.0 | (0.7 | ) | (23 | )% | |||||||||||
License fees and other gross profit | $ | 2.9 | $ | 4.7 | $ | (1.8 | ) | (38 | )% | $ | 5.9 | $ | 8.7 | $ | (2.8 | ) | (32 | )% | |||||
License fees and other gross margin | 73 | % | 77 | % | 72 | % | 74 | % |
Sales and marketing | |||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(in millions, except percentages) | 2015 | 2014 | $ Change | % Change | 2015 | 2014 | $ Change | % Change | |||||||||||||||
Sales and marketing expense | $ | 29.7 | $ | 26.4 | $ | 3.3 | 13 | % | $ | 58.3 | $ | 51.5 | $ | 6.8 | 13 | % | |||||||
% of total revenue | 19 | % | 19 | % | 19 | % | 19 | % |
Second Quarter 2015 Form 10-Q | ![]() | 35 |
Research and development | |||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(in millions, except percentages) | 2015 | 2014 | $ Change | % Change | 2015 | 2014 | $ Change | % Change | |||||||||||||||
Research and development expense | $ | 20.2 | $ | 18.1 | $ | 2.1 | 12 | % | $ | 41.4 | $ | 34.6 | $ | 6.8 | 20 | % | |||||||
% of total revenue | 13 | % | 13 | % | 14 | % | 13 | % |
General and administrative | |||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(in millions, except percentages) | 2015 | 2014 | $ Change | % Change | 2015 | 2014 | $ Change | % Change | |||||||||||||||
General and administrative expense | $ | 18.0 | $ | 13.8 | $ | 4.2 | 30 | % | $ | 34.8 | $ | 26.6 | $ | 8.2 | 31 | % | |||||||
% of total revenue | 12 | % | 10 | % | 11 | % | 10 | % |
36 | ![]() | Second Quarter 2015 Form 10-Q |
Second Quarter 2015 Form 10-Q | ![]() | 37 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(in millions, except percentages) | 2015 | 2014 | $ Change | % Change | 2015 | 2014 | $ Change | % Change | |||||||||||||||
GAAP Revenue | $ | 156.3 | $ | 139.4 | $ | 16.9 | 12 | % | $ | 303.3 | $ | 267.0 | $ | 36.3 | 14 | % | |||||||
Non-GAAP adjustments: | |||||||||||||||||||||||
Add: Acquisition-related deferred revenue write-down | 2.5 | — | 2.5 | 100 | % | 6.0 | — | 6.0 | 100 | % | |||||||||||||
Non-GAAP revenue | $ | 158.7 | $ | 139.4 | $ | 19.3 | 14 | % | $ | 309.3 | $ | 267.0 | $ | 42.3 | 16 | % | |||||||
GAAP income from operations | $ | 14.5 | $ | 16.0 | $ | (1.5 | ) | (9 | )% | $ | 22.5 | $ | 25.3 | $ | (2.8 | ) | (11 | )% | |||||
GAAP operating margin | 9.3 | % | 11.5 | % | 7.4 | % | 9.5 | % | |||||||||||||||
Non-GAAP adjustments: | |||||||||||||||||||||||
Add: Acquisition-related deferred revenue write-down | 2.5 | — | 2.5 | 100 | % | 6.0 | — | 6.0 | 100 | % | |||||||||||||
Add: Stock-based compensation expense | 6.3 | 4.3 | 2.0 | 47 | % | 11.4 | 8.0 | 3.4 | 43 | % | |||||||||||||
Add: Amortization of intangibles from business combinations | 8.1 | 5.7 | 2.4 | 42 | % | 16.2 | 11.8 | 4.4 | 37 | % | |||||||||||||
Add: Employee severance | 0.4 | — | 0.4 | 100 | % | 1.6 | — | 1.6 | 100 | % | |||||||||||||
Add: Impairment of capitalized software development costs | — | 0.8 | (0.8 | ) | (100 | )% | — | 0.8 | (0.8 | ) | (100 | )% | |||||||||||
Add: Acquisition-related integration costs | 0.2 | 0.1 | 0.1 | 100 | % | 0.7 | 0.1 | 0.6 | 600 | % | |||||||||||||
Add: Acquisition-related expenses | 0.7 | 0.1 | 0.6 | 600 | % | 0.8 | 0.1 | 0.7 | 700 | % | |||||||||||||
Add: CEO transition costs | — | — | — | — | % | — | 0.9 | (0.9 | ) | (100 | )% | ||||||||||||
Subtotal(1) | 18.2 | 11.0 | 7.2 | 65 | % | 36.7 | 21.6 | 15.0 | 69 | % | |||||||||||||
Non-GAAP income from operations(1) | $ | 32.7 | $ | 27.0 | $ | 5.7 | 21 | % | $ | 59.2 | $ | 46.9 | $ | 12.3 | 26 | % | |||||||
Non-GAAP operating margin | 20.6 | % | 19.4 | % | 19.1 | % | 17.6 | % |
(1) | The individual amounts for each year may not sum to subtotal or Non-GAAP income from operations due to rounding. |
38 | ![]() | Second Quarter 2015 Form 10-Q |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(in millions, except percentages) | 2015 | 2014 | $ Change | % Change | 2015 | 2014 | $ Change | % Change | |||||||||||||||
GAAP net income | $ | 7.0 | $ | 9.3 | (2.3 | ) | (25 | )% | $ | 11.3 | $ | 13.1 | (1.8 | ) | (14 | )% | |||||||
Non-GAAP adjustments: | |||||||||||||||||||||||
Add: Interest, net | 1.9 | 1.3 | 0.6 | 46 | % | 3.5 | 2.8 | 0.7 | 25 | % | |||||||||||||
Add: Income tax provision | 4.3 | 5.6 | (1.3 | ) | (23 | )% | 6.0 | 8.4 | (2.4 | ) | (29 | )% | |||||||||||
Add: Depreciation | 4.5 | 4.3 | 0.2 | 5 | % | 9.3 | 8.6 | 0.7 | 8 | % | |||||||||||||
Add: Amortization of intangibles from business combinations | 8.1 | 5.7 | 2.4 | 42 | % | 16.2 | 11.8 | 4.4 | 37 | % | |||||||||||||
Add: Amortization of software development costs | 1.0 | 0.4 | 0.6 | 150 | % | 1.8 | 0.8 | 1.0 | 125 | % | |||||||||||||
Subtotal(1) | 19.7 | 17.5 | 2.2 | 13 | % | 36.8 | 32.4 | 4.4 | 14 | % | |||||||||||||
EBITDA(1) | $ | 26.8 | $ | 26.7 | $ | 0.1 | — | % | $ | 48.2 | $ | 45.5 | $ | 2.7 | 6 | % | |||||||
EBITDA Margin | 16.9 | % | 19.2 | % | 15.6 | % | 17.0 | % | |||||||||||||||
Non-GAAP adjustments: | |||||||||||||||||||||||
Add: Other (income) expense, net | $ | (0.7 | ) | $ | (0.2 | ) | $ | (0.5 | ) | 250 | % | $ | (0.4 | ) | $ | — | $ | (0.4 | ) | 100 | % | ||
Add: Loss on sale of business | 2.0 | — | 2.0 | 100 | % | 2.0 | — | 2.0 | 100 | % | |||||||||||||
Add: Loss on debt extinguishment and termination of derivative instruments | — | — | — | — | % | — | 1.0 | (1.0 | ) | (100 | )% | ||||||||||||
Add: Acquisition-related deferred revenue write-down | 2.5 | — | 2.5 | 100 | % | 6.0 | — | 6.0 | 100 | % | |||||||||||||
Add: Stock-based compensation expense | 6.3 | 4.3 | 2.0 | 47 | % | 11.4 | 8.0 | 3.4 | 43 | % | |||||||||||||
Add: Employee severance | 0.4 | — | 0.4 | 100 | % | 1.6 | — | 1.6 | 100 | % | |||||||||||||
Add: Impairment of capitalized software development costs | — | 0.8 | (0.8 | ) | (100 | )% | — | 0.8 | (0.8 | ) | (100 | )% | |||||||||||
Add: Acquisition-related integration costs | 0.2 | 0.1 | 0.1 | 100 | % | 0.7 | 0.1 | 0.6 | 600 | % | |||||||||||||
Add: Acquisition-related expenses | 0.7 | 0.1 | 0.6 | 600 | % | 0.8 | 0.1 | 0.7 | 700 | % | |||||||||||||
Add: CEO transition costs | — | — | — | — | % | — | 0.9 | (0.9 | ) | (100 | )% | ||||||||||||
Subtotal(1) | 11.4 | 5.0 | 6.4 | 128 | % | 22.0 | 10.9 | 11.1 | 102 | % | |||||||||||||
Adjusted EBITDA(1) | $ | 38.2 | $ | 31.8 | $ | 6.4 | 20 | % | $ | 70.2 | $ | 56.3 | $ | 13.9 | 25 | % | |||||||
Adjusted EBITDA Margin | 24.1 | % | 22.8 | % | 22.7 | % | 21.1 | % |
(1) | The individual amounts for each year may not sum to subtotals, EBITDA or Adjusted EBITDA due to rounding. |
Interest expense | |||||||||||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(in millions, except percentages) | 2015 | 2014 | $ Change | % Change | 2015 | 2014 | $ Change | % Change | |||||||||||||||
Interest expense | $ | 1.9 | $ | 1.3 | $ | 0.6 | 46 | % | $ | 3.6 | $ | 2.8 | $ | 0.8 | 29 | % | |||||||
% of total revenue | 1 | % | 1 | % | 1 | % | 1 | % |
Second Quarter 2015 Form 10-Q | ![]() | 39 |
(in millions) | Timing of recognition | June 30, 2015 | December 31, 2014 | Change | % Change | |||||||
Subscriptions | Over the period billed in advance, generally one year | $ | 107.0 | $ | 98.2 | $ | 8.8 | 9 | % | |||
Maintenance | Over the period billed in advance, generally one year | 93.5 | 92.8 | 0.7 | 1 | % | ||||||
Services | As services are delivered | 31.4 | 29.5 | 1.9 | 6 | % | ||||||
License fees and other | Upon delivery of the solution or service | 2.0 | 0.8 | 1.2 | 150 | % | ||||||
Total deferred revenue(1) | 233.9 | 221.3 | 12.6 | 6 | % | |||||||
Less: Long-term portion | 8.8 | 9.0 | (0.2 | ) | (2 | )% | ||||||
Current portion | $ | 225.1 | $ | 212.3 | $ | 12.8 | 6 | % |
(1) | The individual amounts for each year may not sum to total deferred revenue due to rounding. |
Three months ended June 30, | Six months ended June 30, | ||||||||
2015 | 2014 | 2015 | 2014 | ||||||
Effective tax rate | 37.8 | % | 37.7 | % | 34.7 | % | 39.1 | % |
40 | ![]() | Second Quarter 2015 Form 10-Q |
(in millions) | June 30, 2015 | December 31, 2014 | ||||
Cash and cash equivalents | $ | 13.2 | $ | 14.7 | ||
Property and equipment, net | 49.0 | 50.4 | ||||
Software development costs, net | 14.1 | 8.9 | ||||
Total debt | 259.1 | 282.4 | ||||
Working capital | (138.6 | ) | (133.2 | ) | ||
Working capital excluding deferred revenue | 86.5 | 79.1 | ||||
Six months ended June 30, | ||||||
(in millions) | 2015 | 2014 | ||||
Net cash provided by operating activities | $ | 47.6 | $ | 45.1 | ||
Net cash used in investing activities | (14.5 | ) | (42.0 | ) | ||
Net cash (used in) provided by financing activities | (33.6 | ) | 9.6 |
Second Quarter 2015 Form 10-Q | ![]() | 41 |
• | an increase in current period bonus payments from a prior year change in the timing of payouts for certain bonus plans, from quarterly to annually, partially offset by an increase in amounts accrued for current period performance against current period targets; |
• | an increase in monthly commission payments from over-performance against current period targets and from a net increase in the current year payment for prior period over-performance against the prior period target; |
• | an increase in cash outlays for facility costs primarily due to prior year acquisitions; which were partially offset by: |
• | fluctuations in the timing of vendor payments; and |
• | an increase in deferred subscriptions revenue as a result of an increase in subscription sales and related amounts billed and deferred. |
42 | ![]() | Second Quarter 2015 Form 10-Q |
Financial Covenant | Requirement | Ratio as of June 30, 2015 |
Net Leverage Ratio | ≤ 3.50 to 1.00 | 1.92 to 1.00 |
Interest Coverage Ratio | ≥ 2.50 to 1.00 | 18.68 to 1.00 |
Second Quarter 2015 Form 10-Q | ![]() | 43 |
Payments due by period | |||||||||||||||
(in millions) | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | ||||||||||
Recorded contractual obligations: | |||||||||||||||
Debt(1) | $ | 259.1 | $ | 4.4 | $ | 8.7 | $ | 246.0 | $ | — | |||||
Interest payments on debt(2) | 1.2 | 1.1 | 0.1 | — | — | ||||||||||
Unrecorded contractual obligations: | |||||||||||||||
Operating leases(3) | 89.6 | 12.7 | 23.8 | 22.4 | 30.7 | ||||||||||
Interest payments on debt(4) | 20.4 | 5.8 | 11.3 | 3.3 | — | ||||||||||
Purchase obligations(5) | 8.1 | 4.5 | 3.5 | 0.1 | — | ||||||||||
Total contractual obligations | $ | 378.4 | $ | 28.5 | $ | 47.4 | $ | 271.8 | $ | 30.7 |
(1) | Represents principal payments only, under the following assumptions: (i) that the amounts outstanding under the 2014 Credit Facility at June 30, 2015 will remain outstanding until maturity, with minimum payments occurring as currently scheduled, and (ii) that there are no assumed future borrowings on the 2014 Revolving Facility for the purposes of determining minimum commitment amounts. |
(2) | Represents interest payment obligations related to our interest rate swap agreements. |
(3) | Our commitments related to operating leases have not been reduced by incentive payments and reimbursement of leasehold improvements. |
(4) | The actual interest expense recognized in our consolidated statements of comprehensive income will depend on the amount of debt, the length of time the debt is outstanding and the interest rate, which could be different from our assumptions described in (1) above. |
(5) | We utilize third-party technology in conjunction with our solutions and services, with contractual arrangements varying in length from one to five years. In certain cases, these arrangements require a minimum annual purchase commitment by us. |
44 | ![]() | Second Quarter 2015 Form 10-Q |
Second Quarter 2015 Form 10-Q | ![]() | 45 |
46 | ![]() | Second Quarter 2015 Form 10-Q |
Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs(1) | Approximate dollar value of shares that may yet be purchased under the plans or programs (in thousands) | ||||||||||
Beginning balance, April 1, 2015 | $ | 50,000 | ||||||||||||
April 1, 2015 through April 30, 2015 | 4,945 | $ | 49.37 | $ | — | 50,000 | ||||||||
May 1, 2015 through May 31, 2015 | 7,295 | 52.47 | — | 50,000 | ||||||||||
June 1, 2015 through June 30, 2015 | — | — | — | 50,000 | ||||||||||
Total | 12,240 | $ | 51.22 | $ | — | $ | 50,000 |
(1) | In August 2010, our Board of Directors approved a stock repurchase program that authorized us to purchase up to $50.0 million of our outstanding shares of common stock. We have not made any repurchases under the program to date, and the program does not have an expiration date. |
Second Quarter 2015 Form 10-Q | ![]() | 47 |
Filed In | ||||||||||
Exhibit Number | Description of Document | Filed Herewith | Form | Exhibit Number | Filing Date | |||||
10.77 | Employment contract between Blackbaud, Inc. and Bradley J. Holman | X | ||||||||
31.1 | Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||
31.2 | Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | X | ||||||||
32.1 | Certification by the Chief Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||||||
32.2 | Certification by the Chief Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||||||
101.INS* | XBRL Instance Document. | X | ||||||||
101.SCH* | XBRL Taxonomy Extension Schema Document. | X | ||||||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. | X | ||||||||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. | X | ||||||||
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document. | X | ||||||||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. | X |
48 | ![]() | Second Quarter 2015 Form 10-Q |
BLACKBAUD, INC. | |||
Date: | August 6, 2015 | By: | /s/ Michael P. Gianoni |
Michael P. Gianoni | |||
President and Chief Executive Officer | |||
(Principal Executive Officer) | |||
Date: | August 6, 2015 | By: | /s/ Anthony W. Boor |
Anthony W. Boor | |||
Executive Vice President and Chief Financial Officer | |||
(Principal Financial and Accounting Officer) |
Second Quarter 2015 Form 10-Q | ![]() | 49 |
1.1 | The start date of this employment contract is 1 April 2015, though your continuous service date is 1 November 2010. |
1.2 | As an employee you are required to adhere to Company policies, as introduced and varied from time to time. Whilst the Company attempts to ensure employees are kept up to date with all policies and procedures, it is also the responsibility of the employee to keep informed of all policy updates. The full complement of Company policies and procedures are available to all employees on the Company’s intranet site or from Human Resources. |
2.1 | You will be employed by the Company in the capacity set forth above. Neither your job title or duties limits or defines what you may be required to do and the Company has the right at any time during employment to require you to undertake any duties falling within the role and responsibilities and capabilities even if they are undertaken by others from time to time or to require you to undertake another role within your capabilities as the Company’s business needs may from time to time determine. |
2.2 | Your work will initially be directed in accordance with the terms set forth above, or in such manner as the Company may designate from time to time. |
2.3 | You are required to act in the best interests of the Company at all times and in accordance with all the Company's rules, regulations and policies from time to time in force. |
2.4 | The Company may require you (as part of your duties of employment) to perform duties or services not only for the Company but also for any Associated Company where such duties or services are consistent with your duties to the Company. The Company may in agreement with you, assign your employment to any Associated Company on the same terms and conditions as set out, or referred to in this Contract. The foregoing shall be subject to the Change of Control Agreement in the event of a change of control of Blackbaud, Inc., as defined in the Change of Control Agreement. |
3.1 | Your place of work is from your home as a remote employee, although you may be required to work at / or relocate to such other place of work as may be directed by the Company at any point in the future. |
3.2 | The Company may require you to travel for the performance of duties. |
5.1 | You shall receive an annual salary as set forth above, which will be payable half (1/2) in arrears and half (1/2) in advance in twelve (12) monthly instalments, less all applicable taxes. Payments will be by bank transfer to a bank account of your choice which you are required to notify to Human Resources on joining the Company. Future increases to salary, if any, (which shall be entirely at the Company’s discretion) will be notified to you separately and will be set out on your itemised pay statement. |
5.2 | Pay for the full calendar month is credited to your bank account normally on the fifteenth (15th) day of each calendar month. Should you commence or terminate employment other than on a date at the start or end of the calendar month, you will receive salary proportional to the time worked in that calendar month. |
5.3 | Your remuneration package must be treated as confidential and may only be discussed internally with appropriate Managers. |
5.4 | You understand and agree that: |
(a) | The remuneration you receive each monthly period that is greater than an entitlement you would otherwise have under any legislation or industrial instrument satisfies and may be offset against that entitlement. This includes but is not limited to entitlements to overtime payments, annual leave loading, travel and other allowances and penalty payments or loadings; and |
(b) | if any entitlement arises under any legislation or industrial instrument, that entitlement will be calculated by reference to the applicable rate of pay in the relevant industrial instrument or legislation. |
6.1 | Your basic hours of work are thirty-eight (38) hours per week, plus two (2) reasonable additional hours. These hours will normally be Monday to Friday, 8.30am am to 5.30 pm with one (1) hour for lunch. |
6.2 | You will also be required to work such additional hours as and when requested to do so by the Company or when the proper performance of your work so requires. You will not be entitled to be paid extra remuneration for any such additional hours worked in excess of basic weekly hours as the annual salary has been calculated to include compensation for any reasonable additional hours you may be required to work. |
6.3 | You are personally responsible for informing your Manager or Human Resources if you believe that you are frequently working excessive additional hours, of if you have concerns with your workload. This will enable the Company to assess the situation and take appropriate action, if necessary. |
7. | BENEFITS |
7.1 | If eligible, you will be permitted to participate in the Company’s employee benefit programs including pension schemes (together “Schemes”) from time to time in force. |
7.2 | The provision of benefits by the Company is subject to acceptance and continuation of cover for you by a scheme provider/insurer as the Company may from time to time determine at rates acceptable to the Company and to any conditions, exclusions or limitations which such insurer may propose and without prejudice to the Company’s right to amend vary, substitute or terminate such benefits at any time. If a scheme provider/insurer refuses for any reason to provide the relevant benefits to you under the applicable scheme, the Company shall not be liable to provide (or compensate for the loss of) such benefits. You will not be entitled to any compensation associated with the Company's decision to exercise its discretion to amend, vary, replace or terminate of any of the Schemes. |
7.3 | These benefits provided by the Company may be subject to local taxation rules, requirements and deductions. |
7.4 | Full details of the Schemes, as amended from time to time, referred to above will be provided to you on joining the Company or on request from the Human Resources Department. You are required to obtain your own advice as to whether the level of cover provided by the Company is appropriate with respect to your personal circumstances. |
7.5 | You may be eligible to receive additional benefits associated with employment. Details of additional benefits (if any) shall be circulated from time to time by the Company’s Human Resources department. |
8.1 | In addition to the Public holidays normally applicable in Australia or the Australian state of your work location, you shall also accrue Annual Leave at the rate of twenty-five (25) working days’ paid holiday in each complete calendar year of full-time work. In order to ensure that you take sufficient breaks throughout the year, if you accrue in excess of 40 days Annual Leave, the Company may, with one (1) months’ notice, direct you to take up to one half (1/2) of that leave within a specified time. You agree that the Company's direction to take any part of that accrued entitlement is reasonable. |
8.2 | The Company's holiday year is from 1st January to 31st December. |
8.3 | All Annual Leave (including any applications for leave without pay) must be previously agreed in writing with your Manager, giving reasonable notice in writing and will be subject to the business needs of the Company. Not more than two weeks may be taken at any one time, save at the Company’s discretion. |
8.4 | At the start and termination of your employment with the Company, your Annual Leave entitlement will be calculated on a pro-rata basis for the amount of time you have worked for the Company during the relevant holiday year. Your entitlement to Annual Leave will accrue ratably throughout the year. |
8.5 | If, on the termination of your employment you have exceeded your accrued Annual Leave entitlement, this excess will be deducted from your final salary payment or any other sums due to you. If you have an Annual Leave entitlement still owing, the Company may pay you a sum in lieu of accrued Annual Leave (less all applicable taxes). For the avoidance of doubt, one day’s Annual Leave will be calculated on the basis of 1/260th of your salary. |
8.6 | The Company reserves the right to apply an annual shut down period between Christmas and New Year’s Day. In the event that you have insufficient Annual Leave to cover the shutdown period, you agree to take the balance of the period without pay. |
8.7 | Long Service Leave will accrue in accordance with the relevant state legislation. |
9.1 | Personal Leave (incorporating sick and carer’s leave) will accrue at the rate of ten (10) days per year of full time work. |
9.2 | On the first working day of absence for reason of illness or injury, you must notify your Manager (or, in the Manager’s absence, another Manager) of the reason for your absence as soon as possible but no later than 10am. If you are unable to telephone a Manager, you must arrange for the absence to be notified on your behalf. |
9.3 | You must continue to keep the Company informed on a daily basis for the first five (5) working days of absence. |
9.4 | A Leave Form must be submitted to cover the whole of the absence period, in addition to a Medical Certificate where appropriate. Entitlement to payment is subject to notification of absence and production of medical certificates as required above. |
9.5 | At its expense the Company reserves the right to require you to submit to such medical examination by a medical adviser nominated by the Company as the Company may from time to time require in the event of prolonged, recurrent or frequent absence due to sickness or injury, if you suffer from an illness or injury of any type which in the Company's opinion may prevent or restrict you from performing the inherent requirements of your position or at any time upon written request. You hereby give authority for the medical advisor to disclose the report of any such examination to the Company. |
9.6 | Paid Personal Leave accrues progressively during each year. No payment for unused accrued Paid Personal Leave will be paid upon termination of employment for any reason. |
10.1 | You may not remove any money, equipment, or other items of value belonging to the Company from its premises except lawfully for the purposes of Company business or when specific written permission is obtained from your Manager, even if it is your intention to return the property in due course. |
10.2 | On the termination of your employment with the Company for any reason, you shall immediately return to the Company, in accordance with its instructions, all equipment, correspondence, records, specifications, notes, reports and other documents and any copies thereof and any other property belonging to the Company or any Associated Company (including, but not limited to, keys, laptops, mobile phones, equipment and security passes) which are in your possession or under your control. In respect of any such items or information held on any computer or other equipment belonging to you, you undertake to delete any such items or information immediately on the termination of your employment. You shall, if so required by the Company, confirm in writing compliance with the obligations under this clause. |
10.3 | Access to the Company’s intranet, internet, email and any other Management Information Systems (MIS) is not to be used in a way which contravenes its policies. |
10.4 | By signing this Agreement, you acknowledge that all records, reports, correspondence, by e-mail, software and other data and information generated by or residing upon the MIS are property of the Company and may be used by it for any purposes permitted by law. By signing this Agreement you also agree that the Company can access all such data and information. |
10.5 | All MIS and computer facilities at the workplace, or provided by the Company (including but not limited to personal communication devices that can access the Internet) or which are used at the Company's expense may be subject to monitoring. |
10.6 | Computer surveillance is currently being conducted within the workplace and will continue to be conducted upon the commencement of employment on a continuous and ongoing basis. The types of computer surveillance that may be carried out include monitoring websites accessed by employees and monitoring and reading emails sent, received and stored on the Company's network. For further details on the methods of computer surveillance used, please refer to the policy. |
10.8 | The Company may also view mobile phone/personal communication device records and by accepting employment with the Company you consent to such monitoring on all communication tools provided by the Company. |
11.1 | It is a condition of employment that you agree to comply with all medical, health and safety regulations applicable at any time. |
11.2 | You will take all reasonably practicable steps to ensure your health and safety and welfare while at work. It is your legal duty to take care of your own health and safety and that of your colleagues. You are referred to the Company’s Workplace Health & Safety Policy (and in particular, you must report any incidents which have or may have led to injury or damage and comply with any self-assessment procedures relating to health and safety which the Company or any Associated Company may establish from time to time). |
11.3 | In the interests of health of all employees, the Company operates a no smoking policy. It is a disciplinary offence to smoke at any time on Company premises. |
12.1 | It is stipulated and agreed that as a result of your employment with the Company, you have and will have access to valuable, highly confidential, privileged and proprietary information not generally available in the public domain relating to the Company’s Business (the “Confidential Information”). For purposes of this Agreement, “Confidential Information” means the Company’s, or its affiliated companies’, trade secrets; patents; copyrights; software (including, without limitation, all programs, specifications, applications, routines, subroutines, techniques, algorithms, and ideas for formulae); products and/or services; concepts; inventions; know-how; data; drawings; designs; documents; names and/or lists of clients, customers, client and/or customer usage, prospective clients and/or customers, employees, agents, contractors, and suppliers; marketing information; business plans; business methodologies and processes; strategies; financial information and other business records; and all copies of any of the foregoing, including notes, extracts, memoranda shared with, prepared or suffered or directed to be prepared by you based on any Confidential Information. It is further acknowledged and agreed that the unauthorised use or disclosure by you of any of the Confidential Information would seriously damage the Company in its Business. Confidential Information does not include generalised skills or knowledge you acquire in the course of the Employee’s duties. |
12.2 | As a consequence of the above, with respect to any Confidential Information you obtain during or as the result of your performance of services for the Company and/or its customers, affiliated companies, vendors, suppliers and distributors, whatever its nature and form and whether obtained orally, by observation, from written materials or otherwise, you agree that during the term of your employment and after the termination of your employment for any reason: |
• | You will hold all Confidential Information in strict confidence and will not use, publish, divulge or otherwise reveal or allow to be revealed any portion thereof to any third person, company or other entity, except to or with the prior written consent of the Company; |
• | You will use best efforts to ensure that all Confidential Information is properly protected and kept from unauthorised persons or entities, and will immediately report to the Company any misuse of Confidential Information by another person or entity that you may encounter or of which you may become aware; |
• | You will make no use of any Confidential Information except such use as is required in the performance of your services for the Company; and |
• | Upon termination of your employment with the Company for any reason, or upon the Company’s request, you will immediately deliver to the Company all documents, software, hardware, written materials and other items of any kind, and any copies thereof that contain Confidential Information. |
13.1 | You understand and agree that any Inventions (as defined below) you develop or conceive during employment with the Company are the sole property of the Company. |
13.2 | “Inventions” shall include any inventions, improvements, developments, discoveries, programs, designs, products, processes, information systems and software, as well as any other concepts, works and ideas, whether patentable or not, relating to any present or prospective activities or business of the Company. |
13.3 | You agree to make the Company aware of all such Inventions. To the maximum extent permitted by applicable law, you further agree to assign and do hereby assign to the Company all rights, title and interest in and to all such Inventions hereafter made by the Employee. This clause does not apply to any Invention for which you affirmatively prove that: |
• | no equipment, supplies, facility, trade secrets, or Confidential Information of the Company was used; |
• | the Invention was developed entirely on your own time; and |
• | the Invention did not result, either directly or indirectly, from any work you performed for the Company. |
14.1 | During the Restraint Period, you shall not directly or indirectly and whether alone or in conjunction with or on behalf of any other person and whether as a principal, shareholder, director, employee, agent, contractor, consultant, partner or otherwise offer employment to or procure employment for any person known to you, who was involved in product research and development or sales or who was a director or senior employee of the Company or was providing consultancy services to the Company at any time during the six (6) months immediately prior to termination of your employment and with whom you have dealt with at any time in the twelve (12) months immediately prior to termination of your employment; |
14.2 | During the Restraint Period, you shall not directly or indirectly and whether alone or in conjunction with or on behalf of any other person and whether as a principal, shareholder, director, employee, agent, contractor, consultant, partner or otherwise so as to compete with the Company or any Associated Company canvass, solicit or approach or cause to be canvassed, solicited or approached any Relevant Customer for the sale or supply of Relevant Products or Services or endeavour to do so. |
14.3 | During the Restraint Period, you shall not directly or indirectly and whether alone or in conjunction with or on behalf of any other person and whether as a principal, shareholder, director, employee, agent, contractor, consultant, partner or otherwise deal or contract with any Relevant Customer in relation to the sale or supply of any Relevant Products or Services, or endeavour or undertake to do so or encourage any Relevant Customer to discontinue, terminate or not renew his, her or its relationship with the Company or Associated Company. |
14.4 | During the Restraint Period, you shall not without the prior written consent of the Company directly or indirectly and whether alone or in conjunction with or on behalf of any other person and whether as a principal, shareholder, director, employee, agent, contractor, consultant, partner or otherwise perform the Restrained Duties within the Restricted Territory for any other business which: |
14.5 | You shall not represent yourself as being interested in or employed by or in any way connected with the Company or any Associated Company (other than as a former employee of the Company) or use in connection with any business any name which includes the name of the Company or any Associated Company or any colourable imitation of it. |
14.6 | Nothing in clause 14 shall preclude you from holding (directly or through nominees) investments listed on a recognised stock exchange as long as you do not hold more than five (5) per cent of the issued shares or other securities of any class of any one company. |
14.7 | Whilst the restrictions in this clause 14 (on which you hereby acknowledge that you have had the opportunity to take independent advice) are regarded by the parties as fair and reasonable in the circumstances and necessary for the protection of the Company or of any Associated Company and do not bear harshly on you, it is hereby declared that each of the restrictions in this clause 14 are intended to be separate and severable. If any restriction if held to be unreasonably wide but would be valid if part of the wording (including in particular but without limitation the defined expressions referred to in clause 14.10) were deleted, such restriction will apply with so much of the wording deleted as may be necessary to make it valid. |
14.8 | The parties agree that the Restraint Period will be reduced by one day for every day during which at the Company's direction and pursuant to clause 16.5 you have been excluded from the Company's premises and/or has not carried out any duties or has carried out duties other than normal duties. |
14.9 | If you apply for or are offered new employment, an appointment or engagement, before entering into any related contract, you will bring the terms of this Clause 14 and Clause 16 to the attention of a third party proposing directly or indirectly to employ, appoint or engage you. |
14.10 | For the purposes of this clause 14, the following expressions have the following meanings: |
(a) | negotiating with the Company or any Associated Company for the sale or supply of Relevant Products or Services; or |
(b) | a client or customer of the Company or any Associated Company for the sale or supply of Relevant Products or Services; or |
(c) | in the habit of dealing with the Company or any Associated Company for the sale or supply of Relevant Products or Services; |
(i) | duties the same or similar to those performed by the Employee in the course of the Employee's employment with the Company or Associated Company; or |
(ii) | duties which utilise the skills, competencies or knowledge used or gained by the Employee in the roles or roles the Employee held with the Company or Associated Company during the 12 month period immediately prior to the Termination Date; |
(i) | 12 months, but if that is held by a Court to be unenforceable; |
(ii) | 6 months, but if that is held by a Court to be unenforceable; |
(iii) | 3 months. |
(i) | Australia and New Zealand, but if that is held by a Court to be unenforceable; |
(ii) | Australia, but if that is held by a Court to be unenforceable; |
(ii) | each State and Territory in which the Employee performed work, including those States and Territories in which a Relevant Customer is or was located, in the twelve (12) months immediately prior to the Termination Date, but if that is held by a Court to be unenforceable; |
(iv) | the State in which the Employee was located as at the Termination Date, but if that is held by a Court to be unenforceable; |
(v) | the metropolitan area in which the Employee was located as at the Termination Date. |
15.1 | You shall not without the express prior written consent of the Company, directly or indirectly, during your employment with the Company, render professional services to any person or firm for compensation or engage in any activity competitive with and/or adverse to the Company’s purposes, mission or interests, whether alone, as a partner or member, or as an officer, director, employee or shareholder of any other corporation or entity or as a trustee, fiduciary or other representative of any other activity or entity. For the avoidance of doubt, Company acknowledges that you serve as a director of Webjet Limited and as a director of ATI Business Group. |
15.2 | You are required to devote full time, attention and abilities to your job duties during working hours, and to act in the best interests of the Company and its Associated Companies at all times. |
15.3 | Subject to any written regulations issued by the Company which may be applicable, neither you nor your Immediate Relatives, nor any company or business entity in which you or they have an interest, are entitled to receive or obtain directly or indirectly any payment, discount, rebate, commission or other benefit from third parties in respect of any business transacted (whether or not by you) by or on behalf of the Company or any Associated Company and if you, your Immediate Relatives or any company or business entity in which you or they have an interest, directly or indirectly obtain any such payment, discount, rebate, commission or other benefit you will forthwith account to the Company or the relevant Associated Company for the amount received or the value of the benefit so obtained. |
15.4 | You have disclosed fully to the Company all circumstances in respect of which there is, or there might be, a conflict of interest between you and the Company or any Associated Company, or your Immediate Relatives, and you undertakes to disclose fully and immediately to the Company any such circumstances which may arise during the course of employment or in respect of which you become aware in respect of other employees. |
15.5 | You hereby warrant you are free to take up the employment and that there are no restrictions or terms in any agreement whether verbal or otherwise which could prevent or hinder the performance of your duties to the Company or any Associated Company or give rise to any claim against or liability on the part of the Company or any Associated Company. If at any time it becomes apparent that there may be such restrictions or if any such claims are made or threatened, then the Company reserves the right to terminate this Agreement forthwith without notice or to make such changes to the terms of this Agreement or your duties as it considers necessary in the circumstances. |
16.1 | Subject to Clause 16.2 below, the length of notice to terminate employment with the Company is three (3) months. |
16.2 | The Company reserves the right to terminate your employment without notice, or without pay in lieu of notice, for “Cause” and you shall thereafter be entitled to no compensation or benefits under this Agreement or otherwise. For the purposes of this Agreement, “Cause” means: |
(a) | Your conviction of, or plea of no contest to, any crime (whether or not involving the Company) that constitutes a felony in the jurisdiction in which you are charged, other than unintentional motor vehicle felonies, routine traffic citations or a felony predicated exclusively on your Vicarious Liability. “Vicarious Liability” for purposes of this Agreement shall mean any act for which you are constructively liable, including, but not limited to, any liability that is based on acts of the Company for you are charged solely as a result of your offices with the Company and in which you were not directly involved or did not have prior knowledge of such actions or intended actions; |
(b) | Any act of theft, fraud or embezzlement, or any other misconduct or dishonest behaviour; |
(c) | Your failure or refusal to perform your reasonably-assigned duties (consistent with past practice of the Company and other than due to a disability), provided that such failure or refusal is not corrected as promptly as practicable, and in any event within thirty (30) calendar days after you shall have received written notice from the Company stating the nature of such failure or refusal; |
(d) | Your violation of any of your obligations contained in this Employment Contract, or any other restrictive covenant agreement between you and the Company, which violation is of a character that is likely to materially injure the Company, as determined by the Company in good faith; |
(e) | Personal conduct by you (including but not limited to employee harassment or discrimination) which materially discredits or damages the Company or any subsidiary; and/or |
(f) | Your illegal use of controlled substances. |
16.3 | You agree that the Company may at its absolute discretion make a payment or payments representing salary in lieu of any notice of termination of employment which you are or the Company is required to give. |
16.4 | You agree that to be eligible for any bonus, commission or other variable payments you must be employed during the time of qualification for such payment and employed by the Company at the time such payments are due. |
16.5 | The Company reserves the right to require you not to attend work and/or not to undertake all or any of your duties of employment during any period of notice (whether given by you or the Company), provided always that the Company shall continue to pay your salary and contractual benefits whilst you remain employed by the Company. You will comply with any conditions laid down by the Company including but not limited to the prohibition of any contact and/or dealings between you and the clients and/or suppliers and/or employees of the Company or any Associated Company. |
16.6 | On termination of your employment, you must immediately return to the Company all property in accordance with Clause 10.2 above. |
16.7 | The Company shall have the right to suspend you on full pay and benefits during any period in which the Company is investigating any disciplinary matter involving you or while any disciplinary procedure against you is outstanding. |
16.8 | You agree, subject to any applicable statue, that the Company may at any time (including on termination) deduct from your remuneration any amounts you owe to the Company, including but not limited to the following: |
(a) | amounts paid to you for Annual Leave in advance; |
(b) | amounts overpaid to you; or |
(c) | recovery of costs incurred by you as a result of your use of the Company's property for personal matters (for example personal calls on a company mobile phone. |
Signed: | /s/ Bradley J. Holman | |
Dated: | June 30, 2015 |
1. | I have reviewed this quarterly report on Form 10-Q of Blackbaud, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 6, 2015 | By: | /s/ Michael P. Gianoni | |
Michael P. Gianoni | ||||
President and Chief Executive Officer | ||||
(Principal Executive Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Blackbaud, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 6, 2015 | By: | /s/ Anthony W. Boor | |
Anthony W. Boor | ||||
Executive Vice President and Chief Financial Officer | ||||
(Principal Financial and Accounting Officer) |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | August 6, 2015 | By: | /s/ Michael P. Gianoni | |
Michael P. Gianoni | ||||
President and Chief Executive Officer | ||||
(Principal Executive Officer) |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: | August 6, 2015 | By: | /s/ Anthony W. Boor | |
Anthony W. Boor | ||||
Executive Vice President and Chief Financial Officer | ||||
(Principal Financial and Accounting Officer) |
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