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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities Registered Pursuant to Section 12(b) of the Act: | ||
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on which Registered |
Exhibit No. | Description | |
Press release dated October 28, 2019 reporting unaudited financial results for the quarter ended September 30, 2019. | ||
101.INS* | Inline XBRL Instance Document - the Instance Document does not appear in the interactive data file because its XBRL tags, including Cover Page XBRL tags, are embedded within the Inline XBRL Document. | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
BLACKBAUD, INC. | |||||
Date: | October 28, 2019 | /s/ Anthony W. Boor | |||
Anthony W. Boor | |||||
Executive Vice President and Chief Financial Officer | |||||
(Principal Financial and Accounting Officer) |
Exhibit 99.1 | ||
PRESS RELEASE |
• | Total GAAP revenue was $221.1 million, up 5.5%, with $205.2 million in GAAP recurring revenue, representing 92.8% of total GAAP revenue. GAAP recurring revenue was up 8.8%. |
• | Total non-GAAP revenue was $221.4 million, up 5.4%, with $205.5 million in non-GAAP recurring revenue, representing 92.8% of total non-GAAP revenue. Non-GAAP recurring revenue was up 8.6%. |
• | Non-GAAP organic recurring revenue increased 5.6%. |
• | GAAP income from operations was $7.9 million, with GAAP operating margin of 3.6%, a decrease of 390 basis points. |
• | Non-GAAP income from operations was $36.6 million, with non-GAAP operating margin of 16.5%, a decrease of 240 basis points. |
• | GAAP net income was $4.6 million, with GAAP diluted earnings per share of $0.09, down $0.14. |
• | Non-GAAP net income was $26.9 million, with non-GAAP diluted earnings per share of $0.56, down $0.03. |
• | Non-GAAP free cash flow was $62.5 million, an increase of $4.7 million. |
PRESS RELEASE |
• | Blackbaud sees record attendance at milestone bbcon, the premier tech gathering for social good |
• | Blackbaud announces general availability of breakthrough Church Management software |
• | YourCause, a part of Blackbaud, expands global footprint |
• | CEO Mike Gianoni named one of America's most innovative leaders by Forbes |
• | With the release of its second annual social responsibility report, Blackbaud provides an in-depth look at the company’s purpose, people, governance and impact on the world |
• | For the second consecutive year, AnitaB.org recognizes Blackbaud as one of the Top Companies for Women Technologists |
• | Non-GAAP revenue of $880 million to $910 million |
• | Non-GAAP operating margin of 16.7% to 17.2% |
• | Non-GAAP diluted earnings per share of $2.11 to $2.28 |
• | Non-GAAP free cash flow of $124 million to $134 million |
PRESS RELEASE |
Investor Contact: | Media Contact: | ||
Steve Hufford | media@blackbaud.com | ||
Director of Investor Relations | |||
843-654-2655 | |||
steve.hufford@blackbaud.com |
PRESS RELEASE |
(dollars in thousands) | September 30, 2019 | December 31, 2018 | ||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 29,084 | $ | 30,866 | ||
Restricted cash due to customers | 243,056 | 418,980 | ||||
Accounts receivable, net of allowance of $4,791 and $4,722 at September 30, 2019 and December 31, 2018, respectively | 90,700 | 86,595 | ||||
Customer funds receivable | 7,784 | 1,753 | ||||
Prepaid expenses and other current assets | 75,321 | 59,788 | ||||
Total current assets | 445,945 | 597,982 | ||||
Property and equipment, net | 37,285 | 40,031 | ||||
Operating lease right-of-use assets | 110,840 | — | ||||
Software development costs, net | 94,055 | 75,099 | ||||
Goodwill | 630,644 | 545,213 | ||||
Intangible assets, net | 327,089 | 291,617 | ||||
Other assets | 64,154 | 65,363 | ||||
Total assets | $ | 1,710,012 | $ | 1,615,305 | ||
Liabilities and stockholders’ equity | ||||||
Current liabilities: | ||||||
Trade accounts payable | $ | 34,169 | $ | 34,538 | ||
Accrued expenses and other current liabilities | 63,947 | 46,893 | ||||
Due to customers | 250,840 | 420,733 | ||||
Debt, current portion | 7,500 | 7,500 | ||||
Deferred revenue, current portion | 320,982 | 295,991 | ||||
Total current liabilities | 677,438 | 805,655 | ||||
Debt, net of current portion | 495,556 | 379,624 | ||||
Deferred tax liability | 47,237 | 44,291 | ||||
Deferred revenue, net of current portion | 2,014 | 2,564 | ||||
Operating lease liabilities, net of current portion | 100,133 | — | ||||
Other liabilities | 6,177 | 9,388 | ||||
Total liabilities | 1,328,555 | 1,241,522 | ||||
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, 60,207,091 and 59,327,633 shares issued at September 30, 2019 and December 31, 2018, respectively | 60 | 59 | ||||
Additional paid-in capital | 442,803 | 399,241 | ||||
Treasury stock, at cost; 11,022,799 and 10,760,574 shares at September 30, 2019 and December 31, 2018, respectively | (287,163 | ) | (266,884 | ) | ||
Accumulated other comprehensive loss | (13,665 | ) | (5,110 | ) | ||
Retained earnings | 239,422 | 246,477 | ||||
Total stockholders’ equity | 381,457 | 373,783 | ||||
Total liabilities and stockholders’ equity | $ | 1,710,012 | $ | 1,615,305 |
(dollars in thousands, except per share amounts) | Three months ended September 30, | Nine months ended September 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Revenue | |||||||||||||
Recurring | $ | 205,227 | $ | 188,656 | $ | 611,789 | $ | 562,251 | |||||
One-time services and other | 15,893 | 20,876 | 50,795 | 65,137 | |||||||||
Total revenue | 221,120 | 209,532 | 662,584 | 627,388 | |||||||||
Cost of revenue | |||||||||||||
Cost of recurring | 87,645 | 76,535 | 259,013 | 221,964 | |||||||||
Cost of one-time services and other | 14,152 | 18,702 | 42,874 | 56,482 | |||||||||
Total cost of revenue | 101,797 | 95,237 | 301,887 | 278,446 | |||||||||
Gross profit | 119,323 | 114,295 | 360,697 | 348,942 | |||||||||
Operating expenses | |||||||||||||
Sales, marketing and customer success | 55,499 | 49,077 | 165,963 | 143,047 | |||||||||
Research and development | 25,941 | 24,218 | 80,304 | 75,473 | |||||||||
General and administrative | 28,897 | 24,894 | 84,557 | 78,392 | |||||||||
Amortization | 703 | 1,237 | 3,231 | 3,707 | |||||||||
Restructuring | 400 | (914 | ) | 3,083 | 3,585 | ||||||||
Total operating expenses | 111,440 | 98,512 | 337,138 | 304,204 | |||||||||
Income from operations | 7,883 | 15,783 | 23,559 | 44,738 | |||||||||
Interest expense | (5,111 | ) | (4,140 | ) | (16,233 | ) | (11,960 | ) | |||||
Other income (expense), net | 2,158 | (147 | ) | 4,521 | 359 | ||||||||
Income before provision for income taxes | 4,930 | 11,496 | 11,847 | 33,137 | |||||||||
Income tax provision (benefit) | 364 | 332 | 1,263 | (2,370 | ) | ||||||||
Net income | $ | 4,566 | $ | 11,164 | $ | 10,584 | $ | 35,507 | |||||
Earnings per share | |||||||||||||
Basic | $ | 0.10 | $ | 0.24 | $ | 0.22 | $ | 0.75 | |||||
Diluted | $ | 0.09 | $ | 0.23 | $ | 0.22 | $ | 0.74 | |||||
Common shares and equivalents outstanding | |||||||||||||
Basic weighted average shares | 47,757,769 | 47,279,591 | 47,668,235 | 47,174,903 | |||||||||
Diluted weighted average shares | 48,464,529 | 48,160,146 | 48,223,712 | 48,074,698 | |||||||||
Other comprehensive (loss) income | |||||||||||||
Foreign currency translation adjustment | (3,893 | ) | 1,047 | (5,321 | ) | (1,333 | ) | ||||||
Unrealized (loss) gain on derivative instruments, net of tax | (363 | ) | 566 | (3,234 | ) | 2,410 | |||||||
Total other comprehensive (loss) income | (4,256 | ) | 1,613 | (8,555 | ) | 1,077 | |||||||
Comprehensive income | $ | 310 | $ | 12,777 | $ | 2,029 | $ | 36,584 |
Nine months ended September 30, | ||||||
(dollars in thousands) | 2019 | 2018 | ||||
Cash flows from operating activities | ||||||
Net income | $ | 10,584 | $ | 35,507 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 63,998 | 59,993 | ||||
Provision for doubtful accounts and sales returns | 6,192 | 4,760 | ||||
Stock-based compensation expense | 43,621 | 35,683 | ||||
Deferred taxes | (75 | ) | 1,430 | |||
Amortization of deferred financing costs and discount | 564 | 564 | ||||
Other non-cash adjustments | 2,047 | (2,085 | ) | |||
Changes in operating assets and liabilities, net of acquisition and disposal of businesses: | ||||||
Accounts receivable | (6,375 | ) | (4,480 | ) | ||
Prepaid expenses and other assets | (5,129 | ) | (12,372 | ) | ||
Trade accounts payable | (74 | ) | (134 | ) | ||
Accrued expenses and other liabilities | (13,592 | ) | (6,923 | ) | ||
Deferred revenue | 20,363 | 25,888 | ||||
Net cash provided by operating activities | 122,124 | 137,831 | ||||
Cash flows from investing activities | ||||||
Purchase of property and equipment | (9,597 | ) | (12,910 | ) | ||
Capitalized software development costs | (34,513 | ) | (26,629 | ) | ||
Purchase of net assets of acquired companies, net of cash and restricted cash acquired | (109,353 | ) | (45,315 | ) | ||
Other investing activities | 500 | — | ||||
Net cash used in investing activities | (152,963 | ) | (84,854 | ) | ||
Cash flows from financing activities | ||||||
Proceeds from issuance of debt | 371,200 | 219,900 | ||||
Payments on debt | (255,625 | ) | (233,225 | ) | ||
Employee taxes paid for withheld shares upon equity award settlement | (20,279 | ) | (27,398 | ) | ||
Proceeds from exercise of stock options | 7 | 11 | ||||
Change in due to customers | (215,942 | ) | (425,218 | ) | ||
Change in customer funds receivable | (6,283 | ) | (4,371 | ) | ||
Dividend payments to stockholders | (17,705 | ) | (17,484 | ) | ||
Net cash used in financing activities | (144,627 | ) | (487,785 | ) | ||
Effect of exchange rate on cash, cash equivalents and restricted cash | (2,240 | ) | (285 | ) | ||
Net decrease in cash, cash equivalents and restricted cash | (177,706 | ) | (435,093 | ) | ||
Cash, cash equivalents and restricted cash, beginning of period | 449,846 | 640,174 | ||||
Cash, cash equivalents and restricted cash, end of period | $ | 272,140 | $ | 205,081 |
(dollars in thousands) | September 30, 2019 | December 31, 2018 | ||||
Cash and cash equivalents | $ | 29,084 | $ | 30,866 | ||
Restricted cash due to customers | 243,056 | 418,980 | ||||
Total cash, cash equivalents and restricted cash in the statement of cash flows | $ | 272,140 | $ | 449,846 |
(dollars in thousands, except per share amounts) | Three months ended September 30, | Nine months ended September 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
GAAP Revenue | $ | 221,120 | $ | 209,532 | $ | 662,584 | $ | 627,388 | |||||
Non-GAAP adjustments: | |||||||||||||
Add: Acquisition-related deferred revenue write-down | 259 | 571 | 1,691 | 1,838 | |||||||||
Non-GAAP revenue | $ | 221,379 | $ | 210,103 | $ | 664,275 | $ | 629,226 | |||||
GAAP gross profit | $ | 119,323 | $ | 114,295 | $ | 360,697 | $ | 348,942 | |||||
GAAP gross margin | 54.0 | % | 54.5 | % | 54.4 | % | 55.6 | % | |||||
Non-GAAP adjustments: | |||||||||||||
Add: Acquisition-related deferred revenue write-down | 259 | 571 | 1,691 | 1,838 | |||||||||
Add: Stock-based compensation expense | 784 | 1,270 | 2,549 | 4,010 | |||||||||
Add: Amortization of intangibles from business combinations | 11,225 | 10,625 | 33,970 | 31,688 | |||||||||
Add: Employee severance | 19 | 279 | 1,134 | 866 | |||||||||
Add: Acquisition-related integration costs | — | — | — | 25 | |||||||||
Subtotal | 12,287 | 12,745 | 39,344 | 38,427 | |||||||||
Non-GAAP gross profit | $ | 131,610 | $ | 127,040 | $ | 400,041 | $ | 387,369 | |||||
Non-GAAP gross margin | 59.5 | % | 60.5 | % | 60.2 | % | 61.6 | % | |||||
GAAP income from operations | $ | 7,883 | $ | 15,783 | $ | 23,559 | $ | 44,738 | |||||
GAAP operating margin | 3.6 | % | 7.5 | % | 3.6 | % | 7.1 | % | |||||
Non-GAAP adjustments: | |||||||||||||
Add: Acquisition-related deferred revenue write-down | 259 | 571 | 1,691 | 1,838 | |||||||||
Add: Stock-based compensation expense | 14,866 | 10,730 | 43,621 | 35,683 | |||||||||
Add: Amortization of intangibles from business combinations | 11,928 | 11,862 | 37,201 | 35,395 | |||||||||
Add: Employee severance | 48 | 682 | 3,660 | 1,713 | |||||||||
Add: Acquisition-related integration costs | 1,024 | 756 | 2,206 | 3,383 | |||||||||
Add: Acquisition-related expenses | 220 | 269 | 1,030 | 1,874 | |||||||||
Add: Restructuring costs | 400 | (914 | ) | 3,083 | 3,585 | ||||||||
Subtotal | 28,745 | 23,956 | 92,492 | 83,471 | |||||||||
Non-GAAP income from operations | $ | 36,628 | $ | 39,739 | $ | 116,051 | $ | 128,209 | |||||
Non-GAAP operating margin | 16.5 | % | 18.9 | % | 17.5 | % | 20.4 | % | |||||
GAAP income before provision for income taxes | $ | 4,930 | $ | 11,496 | $ | 11,847 | $ | 33,137 | |||||
GAAP net income | $ | 4,566 | $ | 11,164 | $ | 10,584 | $ | 35,507 | |||||
Shares used in computing GAAP diluted earnings per share | 48,464,529 | 48,160,146 | 48,223,712 | 48,074,698 | |||||||||
GAAP diluted earnings per share | $ | 0.09 | $ | 0.23 | $ | 0.22 | $ | 0.74 | |||||
Non-GAAP adjustments: | |||||||||||||
Add: GAAP income tax provision (benefit) | 364 | 332 | 1,263 | (2,370 | ) | ||||||||
Add: Total non-GAAP adjustments affecting income from operations | 28,745 | 23,956 | 92,492 | 83,471 | |||||||||
Non-GAAP income before provision for income taxes | 33,675 | 35,452 | 104,339 | 116,608 | |||||||||
Assumed non-GAAP income tax provision(1) | 6,735 | 7,090 | $ | 20,868 | $ | 23,322 | |||||||
Non-GAAP net income | $ | 26,940 | $ | 28,362 | $ | 83,471 | $ | 93,286 | |||||
Shares used in computing non-GAAP diluted earnings per share | 48,464,529 | 48,160,146 | 48,223,712 | 48,074,698 | |||||||||
Non-GAAP diluted earnings per share | $ | 0.56 | $ | 0.59 | $ | 1.73 | $ | 1.94 |
(1) | Blackbaud applies a non-GAAP effective tax rate of 20.0% when calculating non-GAAP net income and non-GAAP diluted earnings per share. |
(dollars in thousands) | Three months ended September 30, | Nine months ended September 30, | |||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
GAAP revenue | $ | 221,120 | $ | 209,532 | $ | 662,584 | $ | 627,388 | |||||
GAAP revenue growth | 5.5 | % | 5.6 | % | |||||||||
(Less) Add: Non-GAAP acquisition-related revenue (1) | (5,250 | ) | 571 | (14,194 | ) | 5,056 | |||||||
Non-GAAP organic revenue (2) | $ | 215,870 | $ | 210,103 | $ | 648,390 | $ | 632,444 | |||||
Non-GAAP organic revenue growth | 2.7 | % | 2.5 | % | |||||||||
Non-GAAP organic revenue (2) | $ | 215,870 | $ | 210,103 | $ | 648,390 | $ | 632,444 | |||||
Foreign currency impact on non-GAAP organic revenue (3) | 1,457 | — | 5,413 | — | |||||||||
Non-GAAP organic revenue on constant currency basis (3) | $ | 217,327 | $ | 210,103 | $ | 653,803 | $ | 632,444 | |||||
Non-GAAP organic revenue growth on constant currency basis | 3.4 | % | 3.4 | % | |||||||||
GAAP recurring revenue | $ | 205,227 | $ | 188,656 | $ | 611,789 | $ | 562,251 | |||||
GAAP recurring revenue growth | 8.8 | % | 8.8 | % | |||||||||
(Less) Add: Non-GAAP acquisition-related revenue (1) | (5,490 | ) | 571 | (13,963 | ) | 4,887 | |||||||
Non-GAAP organic recurring revenue | $ | 199,737 | $ | 189,227 | $ | 597,826 | $ | 567,138 | |||||
Non-GAAP organic recurring revenue growth | 5.6 | % | 5.4 | % |
(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 non-GAAP revenue from the acquisition-related deferred revenue write-down attributable to those companies. |
(2) | Non-GAAP organic revenue for the prior year periods presented herein may not agree to non-GAAP organic revenue presented in the respective prior period quarterly financial information solely due to the manner in which non-GAAP organic revenue growth is calculated. |
(3) | 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. |
(dollars in thousands) | Nine months ended September 30, | |||||
2019 | 2018 | |||||
GAAP net cash provided by operating activities | $ | 122,124 | $ | 137,831 | ||
Less: purchase of property and equipment | (9,597 | ) | (12,910 | ) | ||
Less: capitalized software development costs | (34,513 | ) | (26,629 | ) | ||
Non-GAAP free cash flow | $ | 78,014 | $ | 98,292 |