Blackbaud, Inc. (the "Company") (NASDAQ:BLKB), the leading provider
of software and services for the global philanthropic
community, today announced financial results for its fourth quarter
and full year ended December 31, 2015.
Fourth Quarter 2015 versus Fourth
Quarter 2014 Highlights
- Total revenue growth of 15.1% to $175.9 million
- Non-GAAP organic revenue growth of 7.0%; 8.5% in constant
currency
- Recurring revenue represented 77.6% of total revenue
- Income from operations increased 35.3% to $10.3 million
- Non-GAAP income from operations increased 16.7% to $32.2
million
- Cash flow from operations growth of 73.1%, to $29.0
million
Full Year 2015 versus Full Year 2014
Highlights
- Total revenue growth of 13.0% to $637.9 million
- Non-GAAP organic revenue growth of 6.1%; 7.7% in constant
currency
- Recurring revenue represented 76.1% of total revenue
- Income from operations increased 0.8% to $46.7 million
- Non-GAAP income from operations increased 19.9% to $122.0
million
- Cash flow from operations growth of 11.8% to $114.3
million
An explanation of all non-GAAP financial
measures referenced in this press release is included below under
the heading "Non-GAAP Financial Measures." A reconciliation of the
Company's 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.
2016 Full Year Financial
Guidance
- Non-GAAP revenue of $725.0 million to $740.0 million
- Non-GAAP income from operations of $141.0 million to $147.0
million
- Non-GAAP operating margin of 19.4% to 19.9%
- Non-GAAP diluted earnings per share of $1.90 to $1.98
- Cash flow from operations of $145.0 million to $155.0
million
President and CEO, Mike Gianoni, commented, "We
had a strong finish to the year and are very pleased with our 2015
financial results, especially when considering this year marked the
beginning of our cloud-transition for mid-market solutions like
Raiser’s Edge NXT and Financial Edge NXT. Non-GAAP recurring
revenue reached a record 78% of total revenue in the fourth quarter
and fueled the 8.5% non-GAAP organic revenue growth after adjusting
for constant currency. The Company maintained its focus on
efficiency and profitability resulting in strong margin expansion
for the quarter and the full year. We’ve done an excellent job
positioning ourselves to accelerate our revenue growth and improve
our operating leverage in 2016, which is clearly shown by our
financial guidance.”
Fourth Quarter 2015 GAAP and Non-GAAP
Financial Results
Blackbaud generated total revenue of $175.9
million in the fourth quarter of 2015, an increase of 15.1%
compared to $152.8 million in the fourth quarter of 2014. Income
from operations and net income were $10.3 million and $6.4 million,
respectively, up from $7.6 million and $4.8 million, respectively,
in the fourth quarter of 2014. Diluted earnings per share was $0.14
in the fourth quarter of 2015, up from $0.10 during the same period
in 2014.
Total revenue, income from operations and net
income were positively impacted in the fourth quarter from growth
in subscriptions revenue and contributions from Blackbaud's
acquisition of Smart Tuition in October 2015.
Blackbaud achieved non-GAAP revenue of $178.1
million and non-GAAP organic revenue growth of 7.0% in the fourth
quarter of 2015. On a constant currency basis, non-GAAP organic
revenue growth was 8.5% in the fourth quarter of 2015.
Non-GAAP income from operations, which excludes
certain effects of acquisition-related accounting, as well as
certain non-cash and other extraordinary items, increased 16.7% to
$32.2 million in the fourth quarter of 2015, compared to $27.6
million in the same period in 2014. Non-GAAP net income increased
14.6% to $17.8 million in the fourth quarter of 2015 compared to
$15.5 million in the same period in 2014. Non-GAAP diluted earnings
per share was $0.38 in the fourth quarter of 2015, up from $0.34
per diluted share in the same period last year. Non-GAAP diluted
earnings per share would have been $0.39 if it had not been for
revaluation of foreign currency negatively impacting other expense
by approximately $0.5 million.
Non-GAAP income from operations and non-GAAP net
income were positively impacted in the fourth quarter by growth in
subscriptions revenue and contributions from Blackbaud's
acquisition of Smart Tuition in October 2015.
Balance Sheet and Cash Flow
The Company ended the fourth quarter with $15.4
million of cash and cash equivalents, compared to $17.6 million on
September 30, 2015. The Company generated $29.0 million in cash
flow from operations during the fourth quarter, returned $5.6
million to stockholders by way of dividend and had cash outlays of
$8.7 million for capital expenditures and capitalized software. The
Company increased net debt by $169.1 million during the fourth
quarter, primarily due to the acquisition of Smart Tuition in
October 2015. Following the acquisition, the total amount
outstanding on the letters of credit, revolving credit loans and
term loan was $429.0 million.
Full Year 2015 GAAP and Non-GAAP Financial
Results
Blackbaud reported total revenue of $637.9
million for the full year 2015, an increase of 13.0% compared to
$564.4 million for 2014. Income from operations and net income were
$46.7 million and $25.6 million, respectively, for the full year
2015 compared to $46.4 million and $28.3 million, respectively, for
2014. Diluted earnings per share was $0.55 for the full year 2015,
compared to $0.62 for 2014.
Total revenue and income from operations were
positively impacted in 2015 from growth in subscriptions revenue
and contributions from Blackbaud's acquisitions of WhippleHill in
June 2014 and MicroEdge in October 2014, each of which contributed
a full year of revenue in 2015, compared partial period
contributions in the prior year. Total revenue and income from
operations were also positively impacted by incremental revenue
from Blackbaud's acquisition of Smart Tuition in October 2015. Net
income was negatively impacted in 2015 by increased amortization of
finite-lived intangible assets arising from acquisitions, as well
as increased stock-based compensation.
Blackbaud achieved non-GAAP revenue of $647.3
million and non-GAAP organic revenue growth of 6.1% for the full
year 2015. On a constant currency basis, non-GAAP organic revenue
growth was 7.7% for the full year 2015.
Non-GAAP income from operations, which excludes
certain effects of acquisition-related accounting, as well as
certain non-cash and other extraordinary items, increased 19.9% to
$122.0 million for the full year 2015, compared to $101.7 million
in 2014. Non-GAAP net income increased 19.5% to $69.6 million for
the full year 2015 compared to $58.3 million in 2014. Non-GAAP
diluted earnings per share was $1.50 for the full year 2015, up
from $1.27 per diluted share in 2014.
Blackbaud generated $114.3 million in cash flow
from operations for the full year 2015, an 11.8% increase over the
$102.3 million generated for the full year 2014.
Executive Vice President and CFO, Tony Boor,
commented, "While many technology companies lack revenue and margin
growth during a cloud-transition period, Blackbaud posted solid
results on both fronts in 2015. Non-GAAP organic revenue growth
improved 60 basis points to 7.7% on a constant currency basis as a
result of investments we’ve made into sales, customer success and
solution portfolio innovation. We maintained focus on our strategic
initiative to expand margins during the year, and increased
non-GAAP operating margin 130 basis points to 19.1% on a constant
currency basis. I’m very pleased to report that we expect to
improve upon these results in 2016. At the mid-point of our
financial guidance, non-GAAP organic revenue growth exceeds 9% on a
constant currency basis, and non-GAAP operating margin is
approximately 20% on a constant currency basis. We will continue to
effectively manage our balance sheet in 2016, allowing us to seize
compelling opportunities that are accretive to our financial
performance and expand our addressable market."
Long-Term Financial Goal
Update
Blackbaud today announced that it is updating
its long-term aspirational goal for aggregate operating cash flow
over the four year period from 2014 to 2017 from its initial
estimated range of $400 million to $450 million to an updated
estimated range of $500 million to $550 million.
Dividend
Blackbaud announced today that its Board of
Directors has declared a first quarter 2016 dividend of $0.12 per
share payable on March 15, 2016 to stockholders of record on
February 26, 2016.
Conference Call Details
Blackbaud will host a conference call on
February 10, 2016, at 8:00 a.m. (Eastern Time) to discuss the
Company's financial results, operations and related matters. A live
webcast will be available and archived at
www.blackbaud.com/investorrelations, or access this call by dialing
1-888-461-2030 (domestic) or 1-719-457-2712 (international) and
entering passcode 507993.
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 the public. It is
possible that information shared through social media channels
could be deemed material information. Therefore, investors, the
media, and others interested in the Company, are encouraged to
visit Blackbaud's press room, at www.blackbaud.com/press-room, to
further review any information shared through social media.
About Blackbaud
Serving the worldwide philanthropic community
for more than 30 years, Blackbaud (NASDAQ:BLKB) combines innovative
software and services, and expertise to help organizations
achieve their missions. Blackbaud works in over 60 countries
to power the passions of approximately 35,000 customers, including
nonprofits, K-12 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, as well as a
resource network that empowers and connects organizations of all
sizes. Blackbaud's portfolio of software and services
support nonprofit fundraising and relationship management,
digital marketing, advocacy, accounting, payments and analytics, as
well as grant management, corporate social responsibility, and
education. 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, 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:
expectations that we will accelerate our revenue growth and that
our operating margins will continue to improve, expectations that
we will achieve our projected 2016 full year financial guidance and
expectations that effectively managing our capital structure will
allow us to seize compelling opportunities that accelerate our
shift to the cloud and are accretive to our financial performance.
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 and non-GAAP diluted earnings
per share. 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
businesses is deferred and typically recognized over a one-year
period, so Blackbaud's GAAP revenues for the one-year period after
the acquisitions 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 the Company believes 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 Blackbaud believes are not directly related to
its performance in any particular period, but are for its long-term
benefit over multiple periods.
In addition, Blackbaud discusses non-GAAP
organic revenue growth and non-GAAP organic revenue growth on a
constant currency basis, which it believes provides useful
information for evaluating the periodic growth of its business on a
consistent basis. Non-GAAP organic revenue growth excludes
incremental acquisition-related revenue attributable to companies
acquired in the current fiscal year. For companies acquired in the
immediately preceding fiscal year, non-GAAP organic revenue growth
reflects presentation of full year 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, as if there were no
acquisition-related write-downs of acquired deferred revenue to
fair value as required by GAAP. In addition, non-GAAP organic
revenue growth excludes prior period revenue associated with
divested businesses in the current fiscal year. The exclusion of
the prior period revenue is to present the results of the divested
businesses within the results of the combined company for the same
period of time in both the prior and current periods. Blackbaud
believes this presentation provides a more comparable
representation of its current business’ organic revenue growth and
revenue run-rate.
Unaudited calculations of non-GAAP organic
revenue growth and non-GAAP organic revenue growth on a constant
currency basis for the fourth quarter and full year of 2015, as
well as unaudited reconciliations of those non-GAAP measures to
their most directly comparable GAAP measures, are as follows:
| |
|
|
|
| (in thousands, except
percentages) |
Three months ended December
31, |
|
Years ended December 31, |
| 2015 |
2014 |
|
2015 |
2014 |
| GAAP revenue |
$ |
175,877 |
|
$ |
152,813 |
|
|
$ |
637,940 |
|
$ |
564,421 |
|
| GAAP revenue
growth |
15.1 |
% |
|
|
13.0 |
% |
|
| (Less)
Add: Non-GAAP acquisition-related revenue (1) |
(7,990 |
) |
4,642 |
|
|
(858 |
) |
37,429 |
|
| Less:
Revenue from divested businesses (2) |
— |
|
(520 |
) |
|
— |
|
(1,279 |
) |
| Total Non-GAAP
adjustments |
(7,990 |
) |
4,122 |
|
|
(858 |
) |
36,150 |
|
| Non-GAAP revenue
(3) |
$ |
167,887 |
|
$ |
156,935 |
|
|
$ |
637,082 |
|
$ |
600,571 |
|
| Non-GAAP
organic revenue growth |
7.0 |
% |
|
|
6.1 |
% |
|
| |
|
|
|
|
|
| Non-GAAP revenue
(3) |
$ |
167,887 |
|
$ |
156,935 |
|
|
$ |
637,082 |
|
$ |
600,571 |
|
| Foreign currency impact
on Non-GAAP revenue (4) |
2,412 |
|
— |
|
|
9,623 |
|
— |
|
| Non-GAAP revenue on
constant currency basis (4) |
$ |
170,299 |
|
$ |
156,935 |
|
|
$ |
646,705 |
|
$ |
600,571 |
|
| Non-GAAP
organic revenue growth on constant currency basis
|
8.5 |
% |
|
|
7.7 |
% |
|
| |
|
|
|
|
|
|
|
(1) Non-GAAP acquisition-related revenue excludes incremental
acquisition-related revenue calculated in accordance with GAAP that
is attributable to companies acquired in the current fiscal year.
For companies acquired in the immediately preceding fiscal year,
non-GAAP acquisition-related revenue reflects presentation of
full-year 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 from the
acquisition-related deferred revenue write-down attributable to
those companies.
(2) For businesses divested in the current fiscal year, non-GAAP
organic revenue growth excludes a portion of the prior year period
revenue associated with businesses divested of in the current
fiscal year. The exclusion of the prior period revenue is to
present the results of the divested business with the results of
the combined company for the same period of time in both the prior
and current periods.
(3) Non-GAAP revenue for the prior year periods presented herein
will not agree to non-GAAP revenue presented in the respective
prior period quarterly financial information solely due to the
manner in which non-GAAP organic revenue growth is calculated.
(4) To determine non-GAAP organic revenue growth on a constant
currency basis, revenues from entities reporting in foreign
currencies were translated to U.S. Dollars using the comparable
prior period's quarterly weighted average foreign currency exchange
rates. The primary foreign currencies creating the impact are the
Canadian Dollar, EURO, British Pound and Australian Dollar.
Additional details of Blackbaud's methodology
for calculating non-GAAP organic revenue growth and non-GAAP
organic revenue growth on a constant currency basis can be found on
the "Investor Relations" page of the Company's website at
www.blackbaud.com/investorrelations.
As announced at its 2015 Investor Day, beginning
in 2016, Blackbaud intends to update the non-GAAP tax rate it
applies to the aggregate of the non-GAAP adjustments discussed
above, which will impact the tax impact related to non-GAAP
adjustments, non-GAAP net income and non-GAAP diluted earnings per
share measures in future periods. Historically, for the purposes of
determining non-GAAP net income, Blackbaud has utilized a non-GAAP
tax rate of 39.0% in its calculation of the tax impact related to
non-GAAP adjustments. At Investor Day, Blackbaud communicated that
it would be adjusting this rate to 36.0% to better reflect its
periodic effective tax rate calculated in accordance with GAAP and
its then current expectations related to tax rate impacting
legislation such as the domestic production activities deduction
and certain credits which are recurring in nature. Subsequent to
that Investor Day communication, the business research and
development tax credit was permanently extended. As a result, for
the purposes of determining non-GAAP net income in 2016, Blackbaud
now intends to utilize a 32.0% non-GAAP tax rate in its calculation
of the tax impact related to non-GAAP adjustments. The non-GAAP tax
rate utilized in future periods will be reviewed annually to
determine whether it remains appropriate in consideration of
Blackbaud's financial results including its periodic effective tax
rate calculated in accordance with GAAP, its operating environment
and related tax legislation in effect and other factors deemed
necessary. All fourth quarter and full year 2015 measures of the
tax impact related to non-GAAP adjustments, non-GAAP net income and
non-GAAP diluted earnings per share included in this news release
are calculated under Blackbaud's historical methodology.
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 these non-GAAP financial measures reflect the
Blackbaud's ongoing business in a manner that allows for meaningful
period-to-period comparison and analysis of trends in its business.
In addition, Blackbaud believes that the use of these non-GAAP
financial measures provides additional information 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. However, these non-GAAP
financial measures may not be completely comparable to similarly
titled measures of other companies due to differences in the exact
method of calculation between companies. 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.
Reclassifications
In order to provide comparability between
periods presented, "donor restricted cash" and "donations payable"
have been renamed as "restricted cash due to customers" and "due to
customers", respectively, in the previously reported consolidated
balance sheet to conform to presentation of the current period. In
addition, capitalized software development costs have been
presented separately as "software development costs, net", in the
previously reported consolidated balance sheet to conform to
presentation of the current period.
| |
|
|
| Blackbaud, Inc. |
| Consolidated balance sheets |
| (Unaudited) |
| |
|
|
|
(in thousands, except share amounts) |
December 31, 2015 |
December 31, 2014 |
|
Assets |
|
|
| Current
assets: |
|
|
| Cash and
cash equivalents |
$ |
15,362 |
|
$ |
14,735 |
|
| Restricted
cash due to customers |
255,038 |
|
140,709 |
|
| Accounts
receivable, net of allowance of $4,943 and $4,539 at December 31,
2015 and December 31, 2014, respectively |
80,046 |
|
77,523 |
|
| Prepaid
expenses and other current assets |
48,666 |
|
40,392 |
|
| Deferred tax
asset, current portion |
— |
|
14,423 |
|
|
Total current assets |
399,112 |
|
287,782 |
|
| Property
and equipment, net |
52,651 |
|
49,896 |
|
| Software
development costs, net |
19,551 |
|
9,420 |
|
|
Goodwill |
436,449 |
|
349,008 |
|
|
Intangible assets, net |
294,672 |
|
229,307 |
|
| Other
assets |
21,418 |
|
17,770 |
|
|
Total assets |
$ |
1,223,853 |
|
$ |
943,183 |
|
| Liabilities and
stockholders’ equity |
|
|
| Current
liabilities: |
|
|
| Trade
accounts payable |
$ |
19,208 |
|
$ |
11,436 |
|
| Accrued
expenses and other current liabilities |
57,461 |
|
52,201 |
|
| Due to
customers |
255,038 |
|
140,709 |
|
| Debt,
current portion |
4,375 |
|
4,375 |
|
| Deferred
revenue, current portion |
230,216 |
|
212,283 |
|
|
Total current liabilities |
566,298 |
|
421,004 |
|
| Debt, net
of current portion |
404,229 |
|
276,196 |
|
| Deferred
tax liability |
27,996 |
|
43,639 |
|
| Deferred
revenue, net of current portion |
7,119 |
|
8,991 |
|
| Other
liabilities |
7,623 |
|
7,437 |
|
|
Total liabilities |
1,013,265 |
|
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 authorized, 56,873,817
and 56,048,135 shares issued at December 31, 2015 and December 31,
2014, respectively |
57 |
|
56 |
|
| Additional
paid-in capital |
276,340 |
|
245,674 |
|
| Treasury
stock, at cost; 9,903,071 and 9,740,054 shares at December 31, 2015
and December 31, 2014, respectively |
(199,861 |
) |
(190,440 |
) |
| Accumulated
other comprehensive loss |
(825 |
) |
(1,032 |
) |
| Retained
earnings |
134,877 |
|
131,658 |
|
|
Total stockholders’ equity |
210,588 |
|
185,916 |
|
|
Total liabilities and stockholders’
equity |
$ |
1,223,853 |
|
$ |
943,183 |
|
| |
|
|
|
|
|
|
| |
|
|
|
| Blackbaud, Inc. |
| Consolidated statements of comprehensive
income |
| (Unaudited) |
| |
|
|
|
| (in thousands, except share and per share
amounts) |
Three months ended December
31, |
|
Years ended December 31, |
| 2015 |
2014 |
|
2015 |
2014 |
|
Revenue |
|
|
|
|
|
|
Subscriptions |
$ |
98,336 |
|
$ |
73,139 |
|
|
$ |
331,759 |
|
$ |
263,435 |
|
|
Maintenance |
38,069 |
|
38,418 |
|
|
153,801 |
|
147,418 |
|
|
Services |
32,100 |
|
32,603 |
|
|
132,978 |
|
128,371 |
|
| License
fees and other |
7,372 |
|
8,653 |
|
|
19,402 |
|
25,197 |
|
|
Total revenue |
175,877 |
|
152,813 |
|
|
637,940 |
|
564,421 |
|
| Cost of
revenue |
|
|
|
|
|
| Cost of
subscriptions |
52,278 |
|
38,091 |
|
|
167,341 |
|
133,221 |
|
| Cost of
maintenance |
5,887 |
|
7,904 |
|
|
27,066 |
|
25,448 |
|
| Cost of
services |
23,694 |
|
27,592 |
|
|
102,815 |
|
106,506 |
|
| Cost of
license fees and other |
3,357 |
|
3,677 |
|
|
7,409 |
|
8,263 |
|
|
Total cost of revenue |
85,216 |
|
77,264 |
|
|
304,631 |
|
273,438 |
|
| Gross
profit |
90,661 |
|
75,549 |
|
|
333,309 |
|
290,983 |
|
| Operating
expenses |
|
|
|
|
|
| Sales and
marketing |
34,222 |
|
28,713 |
|
|
123,646 |
|
107,360 |
|
| Research
and development |
22,633 |
|
22,914 |
|
|
84,636 |
|
77,179 |
|
| General
and administrative |
22,840 |
|
16,159 |
|
|
76,084 |
|
58,277 |
|
|
Amortization |
695 |
|
174 |
|
|
2,231 |
|
1,803 |
|
|
Total operating expenses |
80,390 |
|
67,960 |
|
|
286,597 |
|
244,619 |
|
| Income from
operations |
10,271 |
|
7,589 |
|
|
46,712 |
|
46,364 |
|
| Interest
expense |
(2,698 |
) |
(1,952 |
) |
|
(8,073 |
) |
(6,011 |
) |
| Other
expense, net |
(318 |
) |
(187 |
) |
|
(1,687 |
) |
(1,119 |
) |
| Income before
provision for income taxes |
7,255 |
|
5,450 |
|
|
36,952 |
|
39,234 |
|
| Income
tax provision |
844 |
|
634 |
|
|
11,303 |
|
10,944 |
|
| Net
income |
$ |
6,411 |
|
$ |
4,816 |
|
|
$ |
25,649 |
|
$ |
28,290 |
|
| Earnings per
share |
|
|
|
|
|
|
Basic |
$ |
0.14 |
|
$ |
0.11 |
|
|
$ |
0.56 |
|
$ |
0.63 |
|
|
Diluted |
$ |
0.14 |
|
$ |
0.10 |
|
|
$ |
0.55 |
|
$ |
0.62 |
|
| Common shares and
equivalents outstanding |
|
|
|
|
|
| Basic
weighted average shares |
45,766,891 |
|
45,377,465 |
|
|
45,623,854 |
|
45,215,138 |
|
| Diluted
weighted average shares |
46,714,204 |
|
46,055,420 |
|
|
46,498,704 |
|
45,799,874 |
|
| Dividends per
share |
$ |
0.12 |
|
$ |
0.12 |
|
|
$ |
0.48 |
|
$ |
0.48 |
|
| Other
comprehensive income |
|
|
|
|
|
| Foreign
currency translation adjustment |
416 |
|
323 |
|
|
62 |
|
261 |
|
|
Unrealized gain (loss) on derivative instruments, net of tax
|
779 |
|
(295 |
) |
|
145 |
|
92 |
|
|
Total other comprehensive income |
1,195 |
|
28 |
|
|
207 |
|
353 |
|
|
Comprehensive income |
$ |
7,606 |
|
$ |
4,844 |
|
|
$ |
25,856 |
|
$ |
28,643 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| Blackbaud, Inc. |
| Consolidated statements of cash
flows |
| (Unaudited) |
| |
|
| |
Years ended December 31, |
|
(in thousands) |
2015 |
2014 |
| Cash flows from
operating activities |
|
|
| Net
income |
$ |
25,649 |
|
$ |
28,290 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
| Depreciation
and amortization |
55,997 |
|
45,417 |
|
| Provision
for doubtful accounts and sales returns |
6,825 |
|
5,248 |
|
| Stock-based
compensation expense |
25,246 |
|
17,345 |
|
| Excess tax
benefits from exercise and vesting of stock-based compensation |
(5,466 |
) |
(7,455 |
) |
| Deferred
taxes |
3,165 |
|
3,050 |
|
| Loss on sale
of business |
1,976 |
|
— |
|
| Impairment
of capitalized software development costs |
239 |
|
1,626 |
|
| Loss on debt
extinguishment and termination of derivative instruments |
— |
|
996 |
|
| Amortization
of deferred financing costs and discount |
899 |
|
734 |
|
| Other
non-cash adjustments |
(197 |
) |
1,163 |
|
| Changes in
operating assets and liabilities, net of acquisition of
businesses: |
|
|
|
Accounts receivable |
(7,593 |
) |
(5,750 |
) |
|
Prepaid expenses and other assets |
(10,979 |
) |
(8,464 |
) |
| Trade
accounts payable |
6,133 |
|
(948 |
) |
|
Accrued expenses and other liabilities |
(166 |
) |
4,014 |
|
|
Restricted cash due to customers |
(34,279 |
) |
(33,510 |
) |
| Due
to customers |
34,279 |
|
33,510 |
|
|
Deferred revenue |
12,612 |
|
17,011 |
|
|
Net cash provided by operating
activities |
114,340 |
|
102,277 |
|
| Cash flows from
investing activities |
|
|
| Purchase
of property and equipment |
(18,633 |
) |
(13,911 |
) |
|
Capitalized software development costs |
(15,481 |
) |
(8,535 |
) |
| Purchase
of net assets of acquired companies, net of cash acquired |
(188,072 |
) |
(188,918 |
) |
| Net cash
used in sale of business |
(521 |
) |
— |
|
|
Net cash used in investing
activities |
(222,707 |
) |
(211,364 |
) |
| Cash flows from
financing activities |
|
|
| Proceeds
from issuance of debt |
312,300 |
|
365,100 |
|
| Payments
on debt |
(184,475 |
) |
(235,589 |
) |
| Debt
issuance costs |
(429 |
) |
(3,003 |
) |
| Proceeds
from exercise of stock options |
32 |
|
188 |
|
| Excess
tax benefits from exercise and vesting of stock-based
compensation |
5,466 |
|
7,455 |
|
| Dividend
payments to stockholders |
(22,508 |
) |
(22,107 |
) |
|
Net cash provided by financing
activities |
110,386 |
|
112,044 |
|
| Effect of exchange rate on
cash and cash equivalents |
(1,392 |
) |
(111 |
) |
| Net increase in
cash and cash equivalents |
627 |
|
2,846 |
|
| Cash and cash
equivalents, beginning of year |
14,735 |
|
11,889 |
|
|
Cash and cash equivalents, end of year |
$ |
15,362 |
|
$ |
14,735 |
|
| |
|
|
|
|
|
|
| |
|
|
|
| Blackbaud, Inc. |
| Reconciliation of GAAP to non-GAAP financial
measures |
| (Unaudited) |
| |
|
|
|
| (in thousands, except per share amounts and
percentages) |
Three months ended December
31, |
|
Years ended December 31, |
| 2015 |
2014 |
|
2015 |
2014 |
| GAAP
Revenue |
$ |
175,877 |
|
$ |
152,813 |
|
|
$ |
637,940 |
|
$ |
564,421 |
|
| Non-GAAP
adjustments: |
|
|
|
|
|
| Add:
Acquisition-related deferred revenue write-down |
2,239 |
|
4,642 |
|
|
9,371 |
|
6,242 |
|
| Non-GAAP
revenue |
$ |
178,116 |
|
$ |
157,455 |
|
|
$ |
647,311 |
|
$ |
570,663 |
|
| |
|
|
|
|
|
| GAAP gross
profit |
$ |
90,661 |
|
$ |
75,549 |
|
|
$ |
333,309 |
|
$ |
290,983 |
|
|
GAAP gross margin |
51.5 |
% |
49.4 |
% |
|
52.2 |
% |
51.6 |
% |
| Non-GAAP
adjustments: |
|
|
|
|
|
| Add:
Acquisition-related deferred revenue write-down |
2,239 |
|
4,642 |
|
|
9,371 |
|
6,242 |
|
| Add:
Stock-based compensation expense |
775 |
|
894 |
|
|
3,494 |
|
3,605 |
|
| Add:
Amortization of intangibles from business combinations |
7,236 |
|
7,868 |
|
|
29,987 |
|
24,345 |
|
| Add:
Employee severance |
26 |
|
— |
|
|
1,492 |
|
— |
|
|
Subtotal |
10,276 |
|
13,404 |
|
|
44,344 |
|
34,192 |
|
| Non-GAAP gross
profit |
$ |
100,937 |
|
$ |
88,953 |
|
|
$ |
377,653 |
|
$ |
325,175 |
|
|
Non-GAAP gross margin |
56.7 |
% |
56.5 |
% |
|
58.3 |
% |
57.0 |
% |
| |
|
|
|
|
|
| GAAP income
from operations |
$ |
10,271 |
|
$ |
7,589 |
|
|
$ |
46,712 |
|
$ |
46,364 |
|
|
GAAP operating margin |
5.8 |
% |
5.0 |
% |
|
7.3 |
% |
8.2 |
% |
| Non-GAAP
adjustments: |
|
|
|
|
|
| Add:
Acquisition-related deferred revenue write-down |
2,239 |
|
4,642 |
|
|
9,371 |
|
6,242 |
|
| Add:
Stock-based compensation expense |
7,347 |
|
4,853 |
|
|
25,246 |
|
17,345 |
|
| Add:
Amortization of intangibles from business combinations |
7,931 |
|
8,042 |
|
|
32,218 |
|
26,148 |
|
| Add:
Employee severance |
961 |
|
— |
|
|
3,174 |
|
— |
|
| Add:
Impairment of capitalized software development costs |
239 |
|
856 |
|
|
239 |
|
1,626 |
|
| Add:
Acquisition-related integration costs |
367 |
|
461 |
|
|
1,091 |
|
796 |
|
| Add:
Acquisition-related expenses |
2,859 |
|
1,170 |
|
|
3,904 |
|
2,315 |
|
| Add: CEO
transition costs |
— |
|
— |
|
|
— |
|
870 |
|
|
Subtotal |
21,943 |
|
20,024 |
|
|
75,243 |
|
55,342 |
|
| Non-GAAP income
from operations |
$ |
32,214 |
|
$ |
27,613 |
|
|
$ |
121,955 |
|
$ |
101,706 |
|
|
Non-GAAP operating margin |
18.1 |
% |
17.5 |
% |
|
18.8 |
% |
17.8 |
% |
| |
|
|
|
|
|
| GAAP net
income |
$ |
6,411 |
|
$ |
4,816 |
|
|
$ |
25,649 |
|
$ |
28,290 |
|
| |
|
|
|
|
|
| Shares used in
computing GAAP diluted earnings per share |
46,714 |
|
46,055 |
|
|
46,499 |
|
45,800 |
|
|
GAAP diluted earnings per share |
$ |
0.14 |
|
$ |
0.10 |
|
|
$ |
0.55 |
|
$ |
0.62 |
|
| |
|
|
|
|
|
| Non-GAAP
adjustments: |
|
|
|
|
|
| Add:
Total Non-GAAP adjustments affecting loss from operations |
21,943 |
|
20,024 |
|
|
75,243 |
|
55,342 |
|
| Add: Loss
on sale of business |
— |
|
— |
|
|
1,976 |
|
— |
|
| Add: Loss
on debt extinguishment and termination of derivative instruments
|
— |
|
— |
|
|
— |
|
996 |
|
| Less: Tax
impact related to Non-GAAP adjustments |
(10,544 |
) |
(9,299 |
) |
|
(33,223 |
) |
(26,328 |
) |
| Non-GAAP net
income |
$ |
17,810 |
|
$ |
15,541 |
|
|
$ |
69,645 |
|
$ |
58,300 |
|
| |
|
|
|
|
|
| Shares used in
computing Non-GAAP diluted earnings per share |
46,714 |
|
46,055 |
|
|
46,499 |
|
45,800 |
|
|
Non-GAAP diluted earnings per share |
$ |
0.38 |
|
$ |
0.34 |
|
|
$ |
1.50 |
|
$ |
1.27 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
| Blackbaud, Inc. |
| Reconciliation of GAAP to Non-GAAP financial
measures (continued) |
| (Unaudited) |
| |
|
|
|
| (in thousands, except
percentages) |
Three months ended December
31, |
|
Years ended December 31, |
| 2015 |
2014 |
|
2015 |
2014 |
| Detail of
certain Non-GAAP adjustments: |
|
|
|
|
|
|
Stock-based compensation expense: |
|
|
|
|
|
| Included
in cost of revenue: |
|
|
|
|
|
| Cost of
subscriptions |
$ |
449 |
|
$ |
131 |
|
|
$ |
1,130 |
|
$ |
687 |
|
| Cost of
maintenance |
67 |
|
187 |
|
|
420 |
|
689 |
|
| Cost of
services |
259 |
|
576 |
|
|
1,944 |
|
2,229 |
|
|
Total included in cost of revenue |
775 |
|
894 |
|
|
3,494 |
|
3,605 |
|
| Included
in operating expenses: |
|
|
|
|
|
| Sales and
marketing |
706 |
|
526 |
|
|
2,979 |
|
2,147 |
|
| Research
and development |
1,556 |
|
1,078 |
|
|
4,865 |
|
3,264 |
|
| General
and administrative |
4,310 |
|
2,355 |
|
|
13,908 |
|
8,329 |
|
|
Total included in operating expenses |
6,572 |
|
3,959 |
|
|
21,752 |
|
13,740 |
|
|
Total stock-based compensation
expense |
$ |
7,347 |
|
$ |
4,853 |
|
|
$ |
25,246 |
|
$ |
17,345 |
|
| |
|
|
|
|
|
|
Amortization of intangibles from business combinations: |
|
|
|
|
|
| Included
in cost of revenue: |
|
|
|
|
|
| Cost of
subscriptions |
$ |
5,775 |
|
$ |
6,524 |
|
|
$ |
23,075 |
|
$ |
20,239 |
|
| Cost of
maintenance |
1,003 |
|
428 |
|
|
4,162 |
|
772 |
|
| Cost of
services |
375 |
|
810 |
|
|
2,382 |
|
2,910 |
|
| Cost of
license fees and other |
83 |
|
106 |
|
|
368 |
|
424 |
|
|
Total included in cost of revenue |
7,236 |
|
7,868 |
|
|
29,987 |
|
24,345 |
|
| Included
in operating expenses |
695 |
|
174 |
|
|
2,231 |
|
1,803 |
|
|
Total amortization of intangibles from
business combinations |
$ |
7,931 |
|
$ |
8,042 |
|
|
$ |
32,218 |
|
$ |
26,148 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Contact:
Mark Furlong
Blackbaud, Inc.
843-654-2097
mark.furlong@blackbaud.com
Media Contact:
Nicole McGougan
Blackbaud, Inc.
843-654-3307
nicole.mcgougan@blackbaud.com
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