Blackbaud, Inc. Announces Second Quarter 2013 Results
Blackbaud, Inc. Announces Second Quarter 2013 Results
Announces Third Quarter 2013 Dividend
CHARLESTON, S.C.--(BUSINESS WIRE)-- Blackbaud, Inc. (NAS: BLKB) , a leading global provider of software and services for nonprofits, today announced financial results for its second quarter ended June 30, 2013.
"Blackbaud generated strong second quarter results, with both revenue and profitability above the high-end of our guidance range," stated Marc Chardon, Chief Executive Officer of Blackbaud. "We saw strong performance across each of our business units and we are seeing positive signs that our integrated product strategy is resonating with customers and having a positive impact on our pipeline of opportunities."
Chardon added, "We see nonprofits across all sectors looking for ways to improve and increase their fundraising, and they are looking for powerful, easy-to-use technology that can help them meet their needs. We believe our best-of-breed offerings in both online fundraising and CRM position Blackbaud well to gain share in the multi-billion dollar nonprofit software market."
Second Quarter 2013 GAAP Financial Results
Blackbaud reported total revenue of $125.5 million for the second quarter of 2013, an increase of 14% compared to $110.2 million for the second quarter of 2012. GAAP income from operations and net income were $14.3 million and $6.6 million, respectively, compared to a loss of $1.9 million and $2.3 million, respectively, for the second quarter of 2012. Diluted earnings per share were $0.15 for the second quarter of 2013, compared to a loss of $0.05 in the same period last year.
Second Quarter 2013 Non-GAAP Financial Results
Total non-GAAP revenue, including $0.3 million of deferred revenue write-down associated with the Convio acquisition, was $125.7 million for the second quarter of 2013, which exceeded the high-end of the company's guidance. Non-GAAP income from operations, which excludes the write-down of Convio deferred revenue, stock-based compensation expense, amortization of intangibles arising from business combinations, integration and restructuring costs, and CEO severance costs, was $26.4 million for the second quarter of 2013, up from $19.3 million in the same period last year and above the high-end of the company's guidance. Non-GAAP net income was $15.0 million for the second quarter of 2013, up from $10.8 million in the same period last year. Non-GAAP diluted earnings per share were $0.33 for the second quarter of 2013, up from $0.25 in the same period last year and also above the high-end of the company's guidance.
A reconciliation between GAAP and non-GAAP results has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."
"Blackbaud generated profitability that was ahead of our expectations as the cost rationalization efforts we have made in recent quarters are positively impacting our financial performance," said Tony Boor, Chief Financial Officer of Blackbaud. "The plans we have put in place to improve operational efficiency are yielding positive results which is allowing us to invest in our business."
Balance Sheet and Cash Flow
The company ended the second quarter with $7.3 million in cash, compared to $8.4 million on March 31, 2013. The company generated $24.5 million in cash flow from operations during the second quarter, returned $5.5 million to stockholders by way of dividend, invested $4.7 million in capital expenditures and capitalized software and reduced its debt balance by $15.5 million.
Blackbaud announced today that its Board of Directors has approved a third quarter 2013 dividend of $0.12 per share payable on September 13, 2013, to stockholders of record on August 28, 2013.
Conference Call Details
Blackbaud will host a conference call today, July 31, 2013, at 8:00 a.m. (Eastern Time) to discuss the company's financial results, operations and related matters. To access this call, dial 877-407-3982 (domestic) or 201-493-6780 (international). A replay of this conference call will be available through August 7, 2013, at 877-870-5176 (domestic) or 858-384-5517 (international). The replay passcode is 416471. A live webcast of this conference call will be available on the "Investor Relations" page of the company's website at www.blackbaud.com/investorrelations and a replay will be archived on the website as well.
Serving the nonprofit and education sectors for 30 years, Blackbaud (NAS: BLKB) combines technology and expertise to help organizations achieve their missions. Blackbaud works with more than 28,000 nonprofit customers in over 60 countries that support higher education, healthcare, human services, arts and culture, faith, the environment, independent K-12 education, animal welfare and other charitable causes. The company offers a full spectrum of cloud-based and on-premise software solutions and related services for organizations of all sizes including: fundraising software, online fundraising software, event fundraising software, eMarketing, social media, advocacy, constituent relationship management (CRM), analytics, financial management and vertical-specific solutions for ticketing, school management, and more. For more information, visit www.blackbaud.com.
Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding: the growing need for nonprofit organizations to invest in new technology; benefits from our integrated product strategy; the positive direction of our company and solutions; customer demand trends; improvements in operational efficiency and the pace of such improvements; our ability to invest more quickly in back office systems; the ability of system investments to help our integrated organizational scale; the ability of our operational efficiency plans to drive meaningful shareholder value; improved revenue growth over time; and, such revenue growth providing value creation. These statements involve a number of risks and uncertainties. Although Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: management of integration of acquired companies and other risks associated with acquisitions; the ability to attract and retain key personnel; general economic risks; uncertainty regarding increased business and renewals from existing customers; continued success in sales growth; risks associated with successful implementation of multiple integrated software products; risks related to our dividend policy and stock repurchase program, including potential limitations on our ability to grow and the possibility that we might discontinue payment of dividends; risks relating to restrictions imposed by the credit facility; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organizations; technological changes that make our products and services less competitive; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC's website at www.sec.gov or upon request from Blackbaud's investor relations department. Blackbaud assumes no obligation and does not intend to update these forward-looking statements, except as required by law. All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.
Non-GAAP Financial Measures
Blackbaud has provided in this release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP revenue, non-GAAP income from operations, non-GAAP net income, non-GAAP diluted earnings per share and non-GAAP operating margin. Blackbaud uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Blackbaud's ongoing operational performance. Blackbaud believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial results from period to period with other companies in Blackbaud's industry, many of which present similar non-GAAP financial measures to investors. Non-GAAP financial results discussed above exclude items such as a write-down of Convio deferred revenue, stock-based compensation expense, costs associated with amortization of intangibles arising from business combinations, integration and restructuring costs, and CEO severance, because they are not directly related to our performance in any particular period, but are for our long-term benefit over multiple periods.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. As previously mentioned, a reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.
|Consolidated balance sheets|
|June 30,||December 31,|
|(in thousands, except share amounts)||2013||2012|
|Cash and cash equivalents||$||7,300||$||13,491|
|Donor restricted cash||27,054||68,177|
|Accounts receivable, net of allowance of $7,542 and $8,546|
|at June 30, 2013 and December 31, 2012, respectively||85,749||75,692|
|Prepaid expenses and other current assets||32,205||40,589|
|Deferred tax asset, current portion||12,973||15,799|
|Total current assets||165,281||213,748|
|Property and equipment, net||49,802||49,063|
|Intangible assets, net||155,746||168,037|
|Liabilities and stockholders' equity|
|Trade accounts payable||$||5,725||$||13,623|
|Accrued expenses and other current liabilities||47,046||45,996|
|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|
|Commitments and contingencies|
|Preferred stock; 20,000,000 shares authorized, none outstanding||-||-|
|Common stock, $0.001 par value; 180,000,000|
|shares authorized, 55,062,141 and 54,859,604 shares issued|
|at June 30, 2013 and December 31, 2012, respectively||55||55|
|Additional paid-in capital||213,707||203,638|
|Treasury stock, at cost; 9,318,148 and 9,209,371 shares|
|at June 30, 2013 and December 31, 2012, respectively||(174,206||)||(170,898||)|
|Accumulated other comprehensive loss||(1,406||)||(1,973||)|
|Total stockholders' equity||153,389||147,684|
|Total liabilities and stockholders' equity||$||653,177||$||705,747|
|Consolidated statements of comprehensive income|
|Three months ended June 30,||Six months ended June 30,|
|(in thousands, except share and per share amounts)||2013||2012||2013||2012|
|Cost of revenue|
|Cost of license fees||643||821||1,368||1,434|
|Cost of subscriptions||21,605||16,561||41,988||29,535|
|Cost of services||26,503||25,299||51,902||45,341|
|Cost of maintenance||6,561||6,178||12,435||12,155|
|Cost of other revenue||1,301||1,646||2,498||3,115|
|Total cost of revenue||56,613||50,505||110,191||91,580|
|Sales and marketing||24,423||24,223||48,815||44,600|
|Research and development||16,483||14,856||32,912||28,160|
|General and administrative||12,849||21,753||25,591||36,254|
|Impairment of cost method investment||-||200||-||200|
|Total operating expenses||54,537||61,562||111,988||109,941|
|Income (loss) from operations||14,318||(1,877||)||18,912||3,375|
|Other expense, net||(309||)||(140||)||(206||)||(448||)|
|Income (loss) before provision for income taxes||12,532||(3,446||)||15,552||1,354|
|Income tax provision (benefit)||5,909||(1,175||)||6,263||866|
|Net income (loss)||$||6,623||$||(2,271||)||$||
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