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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: | |
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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 May 5, 2020 reporting unaudited financial results for the quarter ended March 31, 2020. | ||
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: | May 5, 2020 | /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 $223.6 million, up 3.6%, with $204.9 million in GAAP recurring revenue, representing 91.6% of total GAAP revenue. GAAP recurring revenue was up 3.4%. |
• | Total non-GAAP revenue was $223.6 million, up 3.3%, with $204.9 million in non-GAAP recurring revenue, representing 91.6% of total non-GAAP revenue. Non-GAAP recurring revenue was up 3.0%. |
• | Non-GAAP organic recurring revenue increased 3.0%. |
• | GAAP income from operations was $8.4 million, with GAAP operating margin of 3.8%, an increase of 280 basis points. |
• | Non-GAAP income from operations was $33.9 million, with non-GAAP operating margin of 15.2%, a decrease of 140 basis points. |
• | GAAP net income was $4.6 million, with GAAP diluted earnings per share of $0.10, up $0.12. |
• | Non-GAAP net income was $24.7 million, with non-GAAP diluted earnings per share of $0.51, unchanged from first quarter 2019. |
• | Non-GAAP free cash flow was $(38.3) million, a decrease of $15.8 million. |
PRESS RELEASE |
• | Blackbaud's Board of Directors eliminated the payment of quarterly cash dividends on Blackbaud's common stock |
• | Blackbaud's 401(k) match program is temporarily suspended for US-based employees |
• | Temporary freeze on company hiring efforts |
• | Mike Gianoni, Blackbaud's president and CEO, is forgoing his paycheck for the foreseeable future |
• | Restriction of non-essential employee travel and other operating cost reductions |
• | Employee cash merit increases for 2020 replaced with a one-time restricted stock grant |
• | Employee cash bonus programs for 2020 replaced with a one-time performance stock grant |
• | All worldwide employees that have a base salary equal to or less than $75,000 USD received additional financial support in the form of a one-time bonus of $1,000 USD |
• | World War II veteran and centenarian Captain Tom Moore raised more than £32 million ($39 million) for front-line workers in the UK through Blackbaud’s JustGiving platform, marking the largest individual-led online crowdfundraising campaign in history, Blackbaud donated £100,000 to NHS Charities Together in celebration of Captain Moore completing his 100-lap challenge. |
• | In the wake of the COVID-19 pandemic, Blackbaud announced new measures, including hundreds of free resources to support customers and the broader social economy as organizations around the world were thrown into crisis mode. |
• | A Total Economic Impact™ (TEI) study conducted by Forrester Consulting found that over a three-year period, a higher education institution increased gift revenue by nearly $50 million, increased the average annual gift revenue generated per major gift by more than 60 percent and avoided $1.2 million in labor costs, realizing a 273% return on investment (ROI) with Blackbaud CRM™. |
• | Blackbaud announced a first-of-its-kind Innovation Partnership with Chief Executives for Corporate Purpose (CECP), which will enable Blackbaud corporate social responsibility (CSR) customers to utilize their social investment data with greater impact. |
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) | March 31, 2020 | December 31, 2019 | ||||
Assets | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 24,972 | $ | 31,810 | ||
Restricted cash due to customers | 232,250 | 545,485 | ||||
Accounts receivable, net of allowance of $5,928 and $5,529 at March 31, 2020 and December 31, 2019, respectively | 89,191 | 88,868 | ||||
Customer funds receivable | 1,205 | 524 | ||||
Prepaid expenses and other current assets | 81,004 | 67,852 | ||||
Total current assets | 428,622 | 734,539 | ||||
Property and equipment, net | 35,661 | 35,546 | ||||
Operating lease right-of-use assets | 100,568 | 104,400 | ||||
Software development costs, net | 105,594 | 101,302 | ||||
Goodwill | 631,033 | 634,088 | ||||
Intangible assets, net | 303,097 | 317,895 | ||||
Other assets | 66,346 | 65,193 | ||||
Total assets | $ | 1,670,921 | $ | 1,992,963 | ||
Liabilities and stockholders’ equity | ||||||
Current liabilities: | ||||||
Trade accounts payable | $ | 44,510 | $ | 47,676 | ||
Accrued expenses and other current liabilities | 45,781 | 73,317 | ||||
Due to customers | 233,455 | 546,009 | ||||
Debt, current portion | 10,351 | 7,500 | ||||
Deferred revenue, current portion | 288,682 | 314,335 | ||||
Total current liabilities | 622,779 | 988,837 | ||||
Debt, net of current portion | 520,576 | 459,600 | ||||
Deferred tax liability | 43,286 | 44,594 | ||||
Deferred revenue, net of current portion | 1,715 | 1,802 | ||||
Operating lease liabilities, net of current portion | 91,235 | 95,624 | ||||
Other liabilities | 10,937 | 5,742 | ||||
Total liabilities | 1,290,528 | 1,596,199 | ||||
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, 60,932,639 and 60,206,091 shares issued at March 31, 2020 and December 31, 2019, respectively | 61 | 60 | ||||
Additional paid-in capital | 471,344 | 457,804 | ||||
Treasury stock, at cost; 11,311,712 and 11,066,354 shares at March 31, 2020 and December 31, 2019, respectively | (310,447 | ) | (290,665 | ) | ||
Accumulated other comprehensive loss | (14,140 | ) | (5,290 | ) | ||
Retained earnings | 233,575 | 234,855 | ||||
Total stockholders’ equity | 380,393 | 396,764 | ||||
Total liabilities and stockholders’ equity | $ | 1,670,921 | $ | 1,992,963 |
(dollars in thousands, except per share amounts) | Three months ended March 31, | |||||
2020 | 2019 | |||||
Revenue | ||||||
Recurring | $ | 204,867 | $ | 198,094 | ||
One-time services and other | 18,754 | 17,736 | ||||
Total revenue | 223,621 | 215,830 | ||||
Cost of revenue | ||||||
Cost of recurring | 89,551 | 84,711 | ||||
Cost of one-time services and other | 15,314 | 14,572 | ||||
Total cost of revenue | 104,865 | 99,283 | ||||
Gross profit | 118,756 | 116,547 | ||||
Operating expenses | ||||||
Sales, marketing and customer success | 58,735 | 55,455 | ||||
Research and development | 24,977 | 28,461 | ||||
General and administrative | 25,855 | 27,117 | ||||
Amortization | 741 | 1,376 | ||||
Restructuring | 24 | 1,953 | ||||
Total operating expenses | 110,332 | 114,362 | ||||
Income from operations | 8,424 | 2,185 | ||||
Interest expense | (4,159 | ) | (5,323 | ) | ||
Other income, net | 1,070 | 182 | ||||
Income (loss) before provision (benefit) for income taxes | 5,335 | (2,956 | ) | |||
Income tax provision (benefit) | 696 | (1,834 | ) | |||
Net income (loss) | $ | 4,639 | $ | (1,122 | ) | |
Earnings (loss) per share | ||||||
Basic | $ | 0.10 | $ | (0.02 | ) | |
Diluted | $ | 0.10 | $ | (0.02 | ) | |
Common shares and equivalents outstanding | ||||||
Basic weighted average shares | 48,036,300 | 47,516,912 | ||||
Diluted weighted average shares | 48,455,751 | 47,516,912 | ||||
Other comprehensive (loss) income | ||||||
Foreign currency translation adjustment | (5,728 | ) | 4,590 | |||
Unrealized loss on derivative instruments, net of tax | (3,122 | ) | (932 | ) | ||
Total other comprehensive (loss) income | (8,850 | ) | 3,658 | |||
Comprehensive (loss) income | $ | (4,211 | ) | $ | 2,536 |
Three months ended March 31, | ||||||
(dollars in thousands) | 2020 | 2019 | ||||
Cash flows from operating activities | ||||||
Net income (loss) | $ | 4,639 | $ | (1,122 | ) | |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | ||||||
Depreciation and amortization | 21,804 | 21,724 | ||||
Provision for credit losses and sales returns | 2,488 | 2,032 | ||||
Stock-based compensation expense | 13,580 | 13,726 | ||||
Deferred taxes | 954 | (1,155 | ) | |||
Amortization of deferred financing costs and discount | 188 | 188 | ||||
Other non-cash adjustments | 102 | 1,820 | ||||
Changes in operating assets and liabilities, net of acquisition and disposal of businesses: | ||||||
Accounts receivable | (3,876 | ) | (1,797 | ) | ||
Prepaid expenses and other assets | (5,303 | ) | (12,107 | ) | ||
Trade accounts payable | (4,021 | ) | (3,624 | ) | ||
Accrued expenses and other liabilities | (31,694 | ) | (11,690 | ) | ||
Deferred revenue | (23,364 | ) | (18,006 | ) | ||
Net cash used in operating activities | (24,503 | ) | (10,011 | ) | ||
Cash flows from investing activities | ||||||
Purchase of property and equipment | (2,867 | ) | (1,152 | ) | ||
Capitalized software development costs | (10,937 | ) | (11,319 | ) | ||
Purchase of net assets of acquired companies, net of cash and restricted cash acquired | — | (109,386 | ) | |||
Net cash used in investing activities | (13,804 | ) | (121,857 | ) | ||
Cash flows from financing activities | ||||||
Proceeds from issuance of debt | 144,700 | 271,500 | ||||
Payments on debt | (86,075 | ) | (75,175 | ) | ||
Employee taxes paid for withheld shares upon equity award settlement | (19,782 | ) | (18,400 | ) | ||
Proceeds from exercise of stock options | 1 | 3 | ||||
Change in due to customers | (311,095 | ) | (242,885 | ) | ||
Change in customer funds receivable | (733 | ) | (3,573 | ) | ||
Dividend payments to stockholders | (5,960 | ) | (5,901 | ) | ||
Net cash used in financing activities | (278,944 | ) | (74,431 | ) | ||
Effect of exchange rate on cash, cash equivalents and restricted cash | (2,822 | ) | 1,036 | |||
Net decrease in cash, cash equivalents and restricted cash | (320,073 | ) | (205,263 | ) | ||
Cash, cash equivalents and restricted cash, beginning of period | 577,295 | 449,846 | ||||
Cash, cash equivalents and restricted cash, end of period | $ | 257,222 | $ | 244,583 |
(dollars in thousands) | March 31, 2020 | December 31, 2019 | ||||
Cash and cash equivalents | $ | 24,972 | $ | 31,810 | ||
Restricted cash due to customers | 232,250 | 545,485 | ||||
Total cash, cash equivalents and restricted cash in the statement of cash flows | $ | 257,222 | $ | 577,295 |
(dollars in thousands, except per share amounts) | Three months ended March 31, | |||||
2020 | 2019 | |||||
GAAP Revenue | $ | 223,621 | $ | 215,830 | ||
Non-GAAP adjustments: | ||||||
Add: Acquisition-related deferred revenue write-down | — | 716 | ||||
Non-GAAP revenue | $ | 223,621 | $ | 216,546 | ||
GAAP gross profit | $ | 118,756 | $ | 116,547 | ||
GAAP gross margin | 53.1 | % | 54.0 | % | ||
Non-GAAP adjustments: | ||||||
Add: Acquisition-related deferred revenue write-down | — | 716 | ||||
Add: Stock-based compensation expense | 865 | 974 | ||||
Add: Amortization of intangibles from business combinations | 10,930 | 11,416 | ||||
Add: Employee severance | 32 | 1,119 | ||||
Subtotal | 11,827 | 14,225 | ||||
Non-GAAP gross profit | $ | 130,583 | $ | 130,772 | ||
Non-GAAP gross margin | 58.4 | % | 60.4 | % | ||
GAAP income from operations | $ | 8,424 | $ | 2,185 | ||
GAAP operating margin | 3.8 | % | 1.0 | % | ||
Non-GAAP adjustments: | ||||||
Add: Acquisition-related deferred revenue write-down | — | 716 | ||||
Add: Stock-based compensation expense | 13,580 | 13,726 | ||||
Add: Amortization of intangibles from business combinations | 11,671 | 12,792 | ||||
Add: Employee severance | 97 | 3,421 | ||||
Add: Acquisition-related integration costs | (32 | ) | 718 | |||
Add: Acquisition-related expenses | 139 | 445 | ||||
Add: Restructuring costs | 24 | 1,953 | ||||
Subtotal | 25,479 | 33,771 | ||||
Non-GAAP income from operations | $ | 33,903 | $ | 35,956 | ||
Non-GAAP operating margin | 15.2 | % | 16.6 | % | ||
GAAP income (loss) before provision (benefit) for income taxes | $ | 5,335 | $ | (2,956 | ) | |
GAAP net income (loss) | $ | 4,639 | $ | (1,122 | ) | |
Shares used in computing GAAP diluted earnings (loss) per share | 48,455,751 | 47,516,912 | ||||
GAAP diluted earnings (loss) per share | $ | 0.10 | $ | (0.02 | ) | |
Non-GAAP adjustments: | ||||||
Add: GAAP income tax provision (benefit) | 696 | (1,834 | ) | |||
Add: Total non-GAAP adjustments affecting income from operations | 25,479 | 33,771 | ||||
Non-GAAP income before provision for income taxes | 30,814 | 30,815 | ||||
Assumed non-GAAP income tax provision(1) | $ | 6,163 | $ | 6,163 | ||
Non-GAAP net income | $ | 24,651 | $ | 24,652 | ||
Shares used in computing non-GAAP diluted earnings per share | 48,455,751 | 48,051,289 | ||||
Non-GAAP diluted earnings per share | $ | 0.51 | $ | 0.51 |
(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 March 31, | |||||
2020 | 2019 | |||||
GAAP revenue | $ | 223,621 | $ | 215,830 | ||
GAAP revenue growth | 3.6 | % | ||||
Add: Non-GAAP acquisition-related revenue(1) | — | 716 | ||||
Non-GAAP organic revenue(2) | $ | 223,621 | $ | 216,546 | ||
Non-GAAP organic revenue growth | 3.3 | % | ||||
Non-GAAP organic revenue(2) | $ | 223,621 | $ | 216,546 | ||
Foreign currency impact on non-GAAP organic revenue(3) | 310 | — | ||||
Non-GAAP organic revenue on constant currency basis(3) | $ | 223,931 | $ | 216,546 | ||
Non-GAAP organic revenue growth on constant currency basis | 3.4 | % | ||||
GAAP recurring revenue | $ | 204,867 | $ | 198,094 | ||
GAAP recurring revenue growth | 3.4 | % | ||||
Add: Non-GAAP acquisition-related revenue(1) | — | 716 | ||||
Non-GAAP organic recurring revenue | $ | 204,867 | $ | 198,810 | ||
Non-GAAP organic recurring revenue growth | 3.0 | % |
(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 Australian Dollar, British Pound, Canadian Dollar and EURO. |
(dollars in thousands) | Three months ended March 31, | |||||
2020 | 2019 | |||||
GAAP net cash provided by operating activities | $ | (24,503 | ) | $ | (10,011 | ) |
Less: purchase of property and equipment | (2,867 | ) | (1,152 | ) | ||
Less: capitalized software development costs | (10,937 | ) | (11,319 | ) | ||
Non-GAAP free cash flow | $ | (38,307 | ) | $ | (22,482 | ) |