Blackbaud
Blackbaud, Inc. Announces First Quarter 2015 Results
DGAP-News: Blackbaud 2015-04-29 / 22:45 --------------------------------------------------------------------- Achieves 15.2% Revenue Growth; Non-GAAP Organic Revenue Growth of 8.5% CHARLESTON, S.C., 2015-04-29 22:45 CEST (GLOBE NEWSWIRE) -- Blackbaud, Inc. (Nasdaq:BLKB), a leading global provider of software and services for the nonprofit, charitable giving and education communities, today announced financial results for its first quarter ended March 31. First Quarter 2015 Highlights -- Non-GAAP organic revenue growth accelerated to 8.5%; 9.7% in constant currency -- Total revenue growth of 15.2% to $147.0 million -- Recurring revenue increased to 75.8% of total revenue -- Total subscriptions revenue growth of 24.4% to $72.5 million Mike Gianoni, president and CEO, commented, 'We are very pleased with the strong start to the year in both revenue and profitability. Our recurring revenue has continued to grow in line with our strategy, and exceeded 75% of total revenue for the first time in our history. In addition, we continued solid execution on our key programs within our five growth and operational improvement strategies.' 'Our organic growth and improved non-GAAP operating margin are additional steps toward our long term aspirational goals. We remain committed to achieving the 2015 revenue, profit and cash flow guidance that we provided earlier this year,' concluded Mr. Gianoni. First Quarter 2015 GAAP Financial Results Blackbaud generated total revenue of $147.0 million in the first quarter of 2015, an increase of 15.2% compared to $127.6 million in the first quarter of 2014. Income from operations and net income were $8.0 million and $4.3 million, respectively, compared to $9.3 million and $3.8 million, respectively, in the first quarter of 2014. Diluted earnings per share was $0.09 in the first quarter of 2015, compared to $0.08 in the same period last year. Total revenue, income from operations and net income were positively impacted in the first quarter from growth in subscriptions revenue and contributions from acquisitions completed in 2014. The positive impacts to income from operations and net income were offset by increased amortization of intangible assets arising from those acquisitions. First Quarter 2015 Non-GAAP Financial Results Blackbaud achieved non-GAAP revenue of $150.5 million and non-GAAP organic revenue growth of 8.5% in the first quarter of 2015. On a constant currency basis, non-GAAP organic revenue growth was 9.7% in the first quarter of 2015. Non-GAAP organic revenue growth includes $11.1 million of incremental non-GAAP revenue in the first quarter of 2014 associated with acquired companies, as if the companies were combined throughout the prior period. Non-GAAP income from operations increased 33.1% to $26.5 million in the first quarter of 2015, compared to $19.9 million in the same period last year. Non-GAAP net income increased 34.5% to $14.9 million for the first quarter of 2015 compared to $11.1 million in the same period last year. Non-GAAP diluted earnings per share was $0.32 for the first quarter of 2015, up from $0.24 per diluted share in the same period last year. An explanation of these measures is included below under the heading 'Non-GAAP Financial Measures.' Non-GAAP income from operations and non-GAAP net income were positively impacted in the first quarter by growth in subscriptions revenue and contributions from acquisitions completed in 2014. Tony Boor, Executive Vice President and CFO, commented, 'We are seeing the positive benefits of the investments we have made in areas targeted to accelerate growth, increase total recurring revenue, and continue to increase our operational efficiencies. Our non-GAAP organic revenue growth of 8.5% was a strong ramp from Q4. This was achieved despite the near term impact to revenue of the Raiser's Edge and Financial Edge product transition to NXT subscription-based offers and the currency headwinds from the strong dollar.' 'In addition, our non-GAAP income from operations grew faster than non-GAAP revenue resulting in non-GAAP operating margin expansion. The improvement in non-GAAP margins year-over-year shows that we continue to gain operating leverage in the business through solid execution on our strategic initiatives,' concluded Mr. Boor. Balance Sheet and Cash Flow The company ended the first quarter with $13.3 million of cash and cash equivalents, compared to $14.7 million on December 31, 2014. The company generated $4.2 million in cash flow from operations during the first quarter, increased net borrowings by $5.1 million, returned $5.6 million to stockholders by way of dividend and had cash outlays of $5.7 million for capital expenditures and capitalized software. The reduction in cash flow from operations for the first quarter of 2015 when compared to the same period last year was primarily due to a combination of the change in the timing of payouts for certain bonus plans, from quarterly to annually, and an increase in amounts paid resulting from over-performance against 2014 financial targets. Dividend Blackbaud announced today that its Board of Directors has approved a second quarter 2015 dividend of $0.12 per share payable on June 15 to stockholders of record on May 28. Conference Call Details Blackbaud will host a conference call April 30 at 8:00 a.m. ET to discuss the company's financial results, operations and related matters. To access this call, dial 1-888-516-2438 (domestic) or 1-719-457-2650 (international) and enter passcode 163614. A replay of this call will be available through May 13 at 1-888-203-1112 (domestic) and additional toll-free international numbers, using pass-code 6171777. A live webcast of the call will also be available and archived at www.blackbaud.com/investorrelations. Investors and others should note that Blackbaud announces material financial information including, SEC filings, press releases, public conference calls and webcasts, on its website. Blackbaud also uses this channel, as well as social media channels, to communicate information about the company, its services and other issues with its customers and public. It is possible that information shared through social media channels could be deemed as material information, therefore investors, the media, and others interested in the company, are encouraged to visit Blackbaud's press room to further review any information shared through social media. About Blackbaud Serving the nonprofit, charitable giving and education communities for more than 30 years, Blackbaud (Nasdaq:BLKB) combines technology solutions and expertise to help organizations achieve their missions. Blackbaud works in over 60 countries to support more than 30,000 customers, including nonprofits, K12 private and higher education institutions, healthcare organizations, foundations and other charitable giving entities, and corporations. The company offers a full spectrum of cloud and on-premise solutions, and related services for organizations of all sizes, including nonprofit fundraising and relationship management, eMarketing, advocacy, accounting, payments, analytics, as well as grant management, corporate social responsibility, education and other solutions. Using Blackbaud technology, these organizations raise, invest, manage and award more than $100 billion each year. Recognized as a top company, Blackbaud is headquartered in Charleston, South Carolina and has operations in the United States, Australia, Canada, the Netherlands, Ireland and the United Kingdom. For more information, visit www.blackbaud.com. Forward-looking Statements Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding: estimates for achievement of 2015 financial guidance and long term aspirational goals; expectations for continuing to execute our five point growth and operational improvement strategy; expectations that our recurring revenue will continue to grow in line with strategy expectations and that past investments will continue to accelerate growth and operational efficiencies; and expectations that product transitions will increase revenue. 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; uncertainty regarding increased business and renewals from existing customers; a shifting revenue mix that may impact gross margin; continued success in sales growth; risks related to our dividend policy and stock repurchase program, including the possibility that we might discontinue payment of dividends; 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 gross profit, non-GAAP gross margin, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP diluted earnings per share, EBITDA and Adjusted EBITDA. The company has acquired businesses whose net tangible assets include deferred revenue. In accordance with GAAP reporting requirements, the company recorded write-downs of deferred revenue to fair value, which resulted in lower recognized revenue. Both on a quarterly and year-to-date basis, the revenue for the acquired business is deferred and typically recognized over a one-year period, so our GAAP revenues for the one-year period after the acquisition will not reflect the full amount of revenues that would have been reported if the acquired deferred revenue was not written down to fair value. The non-GAAP measures described above reverse the acquisition-related deferred revenue write-downs so that the full amount of revenue booked by the acquired companies is included, which we believe provides a more accurate representation of a revenue run-rate in a given period. In addition to reversing write-downs of acquisition-related deferred revenue, non-GAAP financial measures discussed above exclude the impact of certain items that we believe are not directly related to our performance in any particular period, but are for our long-term benefit over multiple periods. In addition, we discuss non-GAAP organic revenue growth and non-GAAP organic revenue growth on a constant currency basis, which we believe provide useful tools for evaluating the periodic growth of our business on a consistent basis. For companies acquired in the immediately preceding fiscal year, non-GAAP organic revenue growth reflects presentation of full year or stub period incremental non-GAAP revenue derived from such companies as if they were combined throughout the prior period, and it includes the current period non-GAAP revenue attributable to those companies. We believe this presentation provides a more comparable representation of our current business' organic revenue growth and revenue run-rate. To determine non-GAAP organic revenue growth on a constant currency basis for first quarter of 2015, revenues from entities reporting in foreign currencies were translated into U.S. dollars using the comparable prior year period's quarterly weighted average foreign currency exchange rates which resulted in $1.7 million of incremental non-GAAP revenue for the first quarter of 2015. 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. These non-GAAP financial measures may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies. In addition, 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. 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. Blackbaud, Inc. Consolidated balance sheets (Unaudited) (in thousands, except share amounts) March 31, December 31, 2015 2014 -------------------------------------------------------------------------------- Assets Current assets: Cash and cash equivalents $ 13,286 $ 14,735 Donor restricted cash 58,355 140,709 Accounts receivable, net of allowance of $4,393 and 74,901 77,523 $4,539 at March 31, 2015 and December 31, 2014, respectively Prepaid expenses and other current assets 39,074 40,392 Deferred tax asset, current portion 14,119 14,423 ------------------------ Total current assets 199,735 287,782 Property and equipment, net 47,444 50,402 Goodwill 348,605 349,008 Intangible assets, net 220,910 229,307 Other assets 26,668 26,684 ------------------------ Total assets $ 843,362 $ 943,183 ======================== Liabilities and stockholders' equity Current liabilities: Trade accounts payable $ 11,203 $ 11,436 Accrued expenses and other current liabilities 35,270 52,201 Donations payable 58,355 140,709 Debt, current portion 4,375 4,375 Deferred revenue, current portion 205,876 212,283 ------------------------ Total current liabilities 315,079 421,004 Debt, net of current portion 281,413 276,196 Deferred tax liability 42,443 43,639 Deferred revenue, net of current portion 9,102 8,991 Other liabilities 7,445 7,437 ------------------------ Total liabilities 655,482 757,267 ------------------------ Commitments and contingencies Stockholders' equity: Preferred stock; 20,000,000 shares authorized, none - - outstanding Common stock, $0.001 par value; 180,000,000 shares 57 56 authorized, 56,641,530 and 56,048,135 shares issued at March 31, 2015 and December 31, 2014, respectively Additional paid-in capital 251,340 245,674 Treasury stock, at cost; 9,775,789 and 9,740,054 (192,038) (190,440) shares at March 31, 2015 and December 31, 2014, respectively Accumulated other comprehensive loss (1,827) (1,032) Retained earnings 130,348 131,658 ------------------------ Total stockholders' equity 187,880 185,916 ------------------------ Total liabilities and stockholders' equity $ 843,362 $ 943,183 ======================== Blackbaud, Inc. Consolidated statements of comprehensive income (Unaudited) Three months ended March 31, ----------------------- (in thousands, except share and per share amounts) 2015 2014 -------------------------------------------------------------------------------- Revenue Subscriptions $ 72,513 $ 58,268 Maintenance 38,896 35,652 Services 31,306 28,130 License fees and other 4,278 5,572 ----------------------- Total revenue 146,993 127,622 ----------------------- Cost of revenue Cost of subscriptions 36,178 30,124 Cost of maintenance 7,502 5,414 Cost of services 26,971 26,263 Cost of license fees and other 1,161 1,529 ----------------------- Total cost of revenue 71,812 63,330 ----------------------- Gross profit 75,181 64,292 ----------------------- Operating expenses Sales and marketing 28,562 25,116 Research and development 21,276 16,494 General and administrative 16,843 12,818 Amortization 488 587 ----------------------- Total operating expenses 67,169 55,015 ----------------------- Income from operations 8,012 9,277 Interest income 8 16 Interest expense (1,686) (1,459) Loss on debt extinguishment and termination of - (996) derivative instruments Other expense, net (295) (236) ----------------------- Income before provision for income taxes 6,039 6,602 Income tax provision 1,754 2,788 ----------------------- Net income $ 4,285 $ 3,814 ======================= Earnings per share Basic $ 0.09 $ 0.08 ======================= Diluted $ 0.09 $ 0.08 ======================= Common shares and equivalents outstanding Basic weighted average shares 45,529,668 45,127,645 ======================= Diluted weighted average shares 46,168,096 45,552,451 ======================= Dividends per share $ 0.12 $ 0.12 ======================= Other comprehensive (loss) income Foreign currency translation adjustment (326) 555 Unrealized (loss) gain on derivative instruments, net (469) 312 of tax ----------------------- Total other comprehensive (loss) income (795) 867 ----------------------- Comprehensive income $ 3,490 $ 4,681 ======================= Blackbaud, Inc. Consolidated statements of cash flows (Unaudited) Three months ended March 31, -------------------- (in thousands) 2015 2014 -------------------------------------------------------------------------------- Cash flows from operating activities Net income $ 4,285 $ 3,814 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 13,678 10,674 Provision for doubtful accounts and sales returns 1,358 1,074 Stock-based compensation expense 5,102 3,714 Excess tax benefits from stock-based compensation (584) (603) Deferred taxes (886) 616 Loss on debt extinguishment and termination of - 996 derivative instruments Amortization of deferred financing costs and discount 210 162 Other non-cash adjustments 524 168 Changes in operating assets and liabilities, net of acquisition of businesses: Accounts receivable 555 2,676 Prepaid expenses and other assets 3,633 309 Trade accounts payable (111) 2,789 Accrued expenses and other liabilities (18,768) (4,158) Donor restricted cash 82,140 63,680 Donations payable (82,140) (63,680) Deferred revenue (4,765) (8,967) -------------------- Net cash provided by operating activities 4,231 13,264 -------------------- Cash flows from investing activities Purchase of property and equipment (2,521) (6,119) Purchase of net assets of acquired companies, net of cash - (136) acquired Capitalized software development costs (3,129) (1,152) -------------------- Net cash used in investing activities (5,650) (7,407) -------------------- Cash flows from financing activities Proceeds from issuance of debt 41,800 196,000 Payments on debt (36,694) (173,908) Debt issuance costs - (2,484) Proceeds from exercise of stock options 11 25 Excess tax benefits from stock-based compensation 584 603 Dividend payments to stockholders (5,626) (5,537) -------------------- Net cash provided by financing activities 75 14,699 -------------------- Effect of exchange rate on cash and cash equivalents (105) 105 -------------------- Net (decrease) increase in cash and cash equivalents (1,449) 20,661 Cash and cash equivalents, beginning of period 14,735 11,889 -------------------- Cash and cash equivalents, end of period $ 13,286 $ 32,550 ==================== Blackbaud, Inc. Reconciliation of GAAP to Non-GAAP financial measures (Unaudited) Three months ended March 31, --------------------- (in thousands, except per share amounts and percentages) 2015 2014 -------------------------------------------------------------------------------- GAAP Revenue $ 146,993 $ 127,622 ===================== Non-GAAP adjustments: Add: Acquisition-related deferred revenue write-down 3,522 - Non-GAAP revenue $ 150,515 $ 127,622 ===================== GAAP gross profit $ 75,181 $ 64,292 ===================== GAAP gross margin 51.1% 50.4% ===================== Non-GAAP adjustments: Add: Acquisition-related deferred revenue write-down 3,522 - Add: Stock-based compensation expense 901 876 Add: Amortization of intangibles from business 7,639 5,437 combinations Add: Employee severance 596 - --------------------- Subtotal 12,658 6,313 Non-GAAP gross profit $ 87,839 $ 70,605 ===================== Non-GAAP gross margin 58.4% 55.3% ===================== GAAP income from operations $ 8,012 $ 9,277 ===================== GAAP operating margin 5.5% 7.3% ===================== Non-GAAP adjustments: Add: Acquisition-related deferred revenue write-down 3,522 - Add: Stock-based compensation expense 5,102 3,714 Add: Amortization of intangibles from business 8,127 6,024 combinations Add: Employee severance 1,139 - Add: Acquisition-related integration costs 484 - Add: Acquisition-related expenses 73 - Add: CEO transition costs - 870 --------------------- Subtotal 18,447 10,608 Non-GAAP income from operations $ 26,459 $ 19,885 ===================== Non-GAAP operating margin 17.6% 15.6% ===================== GAAP net income $ 4,285 $ 3,814 ===================== Shares used in computing GAAP diluted earnings per share 46,168 45,552 ===================== GAAP diluted earnings per share $ 0.09 $ 0.08 ===================== Non-GAAP adjustments: Add: Total Non-GAAP adjustments affecting income from 18,447 10,608 operations Add: Loss on debt extinguishment and termination of - 996 derivative instruments Less: Tax impact related to Non-GAAP adjustments (7,797) (4,312) --------------------- Non-GAAP net income $ 14,935 $ 11,106 ===================== Shares used in computing Non-GAAP diluted earnings per 46,168 45,552 share ===================== Non-GAAP diluted earnings per share $ 0.32 $ 0.24 ===================== Blackbaud, Inc. Reconciliation of GAAP to Non-GAAP financial measures (continued) (Unaudited) Three months ended March 31, ------------------- (in thousands, except percentages) 2015 2014 -------------------------------------------------------------------------------- GAAP net income $ 4,285 $ 3,814 =================== Non-GAAP adjustments: Add: Interest, net 1,678 1,443 Add: Income tax provision 1,754 2,788 Add: Depreciation 4,776 4,303 Add: Amortization of intangibles from business combinations 8,127 6,024 Add: Amortization of software development costs 775 347 ------------------- Subtotal 17,110 14,905 EBITDA $ 21,395 $ 18,719 =================== EBITDA Margin 14.2% 14.7% =================== Non-GAAP adjustments: Add: Other expense, net 295 236 Add: Loss on debt extinguishment and termination of - 996 derivative instruments Add: Acquisition-related deferred revenue write-down 3,522 - Add: Stock-based compensation expense 5,102 3,714 Add: Employee severance 1,139 - Add: Acquisition-related integration costs 484 - Add: Acquisition-related expenses 73 - Add: CEO transition costs - 870 ------------------- Subtotal 10,615 5,816 Adjusted EBITDA $ 32,010 $ 24,535 =================== Adjusted EBITDA Margin 21.3% 19.2% =================== Detail of certain Non-GAAP adjustments: Stock-based compensation expense: Included in cost of revenue: Cost of subscriptions $ 143 $ 189 Cost of maintenance 161 145 Cost of services 597 542 ------------------- Total included in cost of revenue 901 876 Included in operating expenses: Sales and marketing 701 471 Research and development 978 662 General and administrative 2,522 1,705 ------------------- Total included in operating expenses 4,201 2,838 ------------------- Total stock-based compensation expense $ 5,102 $ 3,714 =================== Amortization of intangibles from business combinations: Included in cost of revenue: Cost of subscriptions $ 5,772 $ 4,560 Cost of maintenance 1,153 115 Cost of services 607 656 Cost of license fees and other 107 106 ------------------- Total included in cost of revenue 7,639 5,437 Included in operating expenses 488 587 ------------------- Total amortization of intangibles from business $ 8,127 $ 6,024 combinations =================== CONTACT: Investor Contact: Jagtar Narula Blackbaud, Inc. 843-654-2164 jagtar.narula@blackbaud.com Media Contact: Nicole McGougan Blackbaud, Inc. 843-654-3307 nicole.mcgougan@blackbaud.com News Source: NASDAQ OMX --------------------------------------------------------------------- 2015-04-29 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- Language: English Company: Blackbaud United States ISIN: US09227Q1004 End of News DGAP News-Service --------------------------------------------------------------------- 351047 2015-04-29
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