SECURITIES AND EXCHANGE COMMISSION
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 4, 2004
BLACKBAUD, INC.
Delaware
| 000-50600 | 11-2617163 | |
| (Commission file Number) | (IRS Employer ID Number) | |
| 2000 Daniel Island Drive, Charleston, South Carolina 29492 |
||
| (Address of principal executive offices) | (Zip Code) | |
Registrant’s telephone number, including area code (843) 612-6200
Item 7. Financial Statements and Exhibits.
| (c) | Exhibits |
| Exhibit No. |
Description |
|
99.1
|
Press release dated August 4, 2004 of Blackbaud, Inc. (the “Company”), announcing its operating results for the fiscal quarter ended June 30, 2004. |
Item 12. Results of Operations and Financial Condition.
On August 4, 2004, the Company issued a press release announcing its operating results for the fiscal quarter ended June 30, 2004. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference.
The information furnished in this Item 12 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific release in such a filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BLACKBAUD, INC. |
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| Date: August 4, 2004 | By: | /s/ Timothy V. Williams |
||
| Timothy V. Williams, Vice President and Chief | ||||
| Financial Officer | ||||
Exhibit 99.1
Blackbaud, Inc. Announces Second Quarter 2004 Results
Charleston, South Carolina, August 4, 2004 — Blackbaud, Inc., the leading provider of software and related services designed specifically for nonprofit organizations today announced its second quarter 2004 financial results.
For the quarter ended June 30, 2004, Blackbaud reported total revenue of $35.5 million, an increase of 19% compared with the second quarter of 2003. License revenue increased 29% to $7.3 million, services revenue increased 29% to $11.1 million and maintenance revenue and subscriptions increased 12% to $16.2 million, over the comparable period.
Blackbaud’s GAAP operating income and net income were $9.1 million and $5.3 million, respectively, for the second quarter 2004 compared with $2.4 million and a loss of $0.2 million in the same period last year. Pro forma operating income and net income, which exclude stock-based compensation expense and costs associated with the Company’s recently completed IPO, were $10.6 million and $6.4 million, respectively, compared with $9.1 million and $5.3 million in the same period last year.
On a GAAP basis, earnings per share, on a fully diluted basis, was $0.12 for the quarter ended June 30, 2004, compared with a loss of $0.01 in the same period last year. Pro forma earnings per share was $0.14 for the quarter ended June 30, 2004, compared with $0.12 in the same period last year.
A reconciliation of GAAP to pro forma results has been provided in the financial statement tables included in the press release. Cash from operations for the second quarter of 2004 was $11.3 million compared with $8.6 million in the same period the prior year. Blackbaud had cash of $16.9 million at June 30, 2004.
“We are very pleased with our second quarter results. Nonprofit organizations are increasingly looking to invest in technology solutions that enable them to improve fundraising efforts and streamline operating cost structures. With more than 12,500 customers, 20 years experience, and the broadest suite of integrated applications, Blackbaud stands out as the vendor of choice to help nonprofits tackle these challenges,” said Robert J. Sywolski, Chief Executive Officer of Blackbaud.
Timothy V. Williams, Chief Financial Officer of Blackbaud, added, “The June quarter has historically been a relatively strong quarter for Blackbaud given the fact that many of our customers have fiscal year-ends on June 30th. We believe our second-quarter performance reflects a continuance of this seasonality, coupled with the fact that the Company’s sales and service channels delivered ahead of our expectations.”
Conference Call Details
Blackbaud will host a conference call today, August 4, 2004, at 5:00pm (EDT) to discuss the quarterly results. Blackbaud recently completed its IPO and began trading on July 22. The Company is still in its quiet period following the IPO and, as a result, will limit the call to prepared remarks. To access this call, dial 800-821-1449 (domestic) or 973-409-9260 (international). A replay of this conference call will be available through August 11th at 877-519-4471 (domestic) or 973-341-3080 (international). The replay password is 5024404. A live webcast of this conference call will be available on the “Investor Relations” page of the Company’s web site, and a replay will be archived on our website as well.
About Blackbaud
Blackbaud is the leading global provider of software and related services designed specifically for nonprofit organizations. More than 12,500 organizations — including the American Red Cross, Bowdoin College, the Chesapeake Bay Foundation, the Crohn’s & Colitis Foundation of America, the Detroit Zoological Society, Episcopal High School, Help the Aged, the Mayo Foundation, the New York Philharmonic and United Way of America — use Blackbaud products and consulting services for fundraising, financial management, business intelligence and school administration. Blackbaud’s solutions include The Raiser’s Edge®, The Financial Edge™, The Education Edge™, The Information Edge™, WealthPoint™ and ProspectPoint™ as well as a wide range of consulting and educational services. Founded in 1981, Blackbaud is headquartered in Charleston, South Carolina, and has operations in Toronto, Ontario, Glasgow, Scotland, and Sydney, Australia.
Blackbaud, the Blackbaud logo, The Raiser’s Edge, The Financial Edge, The Education Edge, The Information Edge, WealthPoint and ProspectPoint are trademarks or registered trademarks of Blackbaud, Inc.
Forward-looking Statements
Except for historical information, all of the statements, expectations and assumptions contained in this news release are forward-looking statements that 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: continued success in sales growth; adoption of our products and services by nonprofits; uncertainty regarding increased business and renewals from existing customers; risk associated with product concentration; lengthy sales and implementation cycles; economic conditions and seasonality; competition; risks associated with management of growth; risks associated with acquisitions; technological changes that make our products and services less competitive; the ability to attract and retain key personnel; 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 upon request from Blackbaud’s investor relations department.
Non-GAAP Financial Measures
Blackbaud has provided in this release certain financial information that has not been prepared in accordance with generally accepted accounting principles (GAAP). This information includes but is not limited to pro forma gross margin, pro forma operating income and margin, pro forma net income and pro forma earnings per share. Blackbaud utilizes 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 the Company’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 with other companies in the Company’s industry, many of which present similar non-GAAP financial measures to investors. As noted, the non-GAAP financial results discussed above exclude the impact of costs associated with the Company’s IPO (completed on July 22nd) and the expensing of stock option compensation.
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 measure as detailed above. As previously mentioned, a reconciliation of GAAP to pro forma results has been provided in the financial statement tables included in this press release.
BLACKBAUD, INC.
BALANCE SHEETS
(In thousands, except per share data)
| June 30, | December 31, | |||||||
| 2004 |
2003 |
|||||||
| (unaudited) | ||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 16,851 | $ | 6,708 | ||||
Accounts receivable, net of allowance of $1,327 and
$1,222, respectively |
22,879 | 14,518 | ||||||
Prepaid expenses and other current assets |
3,003 | 2,713 | ||||||
Deferred tax asset, current portion |
1,406 | 1,799 | ||||||
Total current assets |
44,139 | 25,738 | ||||||
Property and equipment, net |
6,551 | 6,621 | ||||||
Deferred tax asset |
83,111 | 86,966 | ||||||
Goodwill |
1,481 | 1,386 | ||||||
Deferred financing fees, net |
— | 156 | ||||||
Other assets |
62 | 99 | ||||||
Total assets |
$ | 135,344 | $ | 120,966 | ||||
Liabilities and Shareholders’ Equity |
||||||||
Current liabilities: |
||||||||
Trade accounts payable |
$ | 2,937 | $ | 2,590 | ||||
Current portion of long-term debt and capital lease
obligations |
116 | 142 | ||||||
Accrued expenses and other current liabilities |
9,867 | 9,659 | ||||||
Deferred revenue |
51,187 | 43,673 | ||||||
Total current liabilities |
64,107 | 56,064 | ||||||
Long-term debt and capital lease obligations |
— | 5,044 | ||||||
Total liabilities |
64,107 | 61,108 | ||||||
Commitments and contingencies |
||||||||
Shareholders’ equity: |
||||||||
Preferred stock; 5,000,000 shares authorized |
— | — | ||||||
Common stock, no par value; 95,000,000 shares
authorized, 42,509,107 and 42,408,872
shares issued and outstanding in 2004 and 2003, respectively |
42,093 | 41,613 | ||||||
Deferred compensation |
(2,973 | ) | (4,795 | ) | ||||
Accumulated other comprehensive (loss) income |
255 | 518 | ||||||
Retained earnings |
31,862 | 22,522 | ||||||
Total shareholders’ equity |
71,237 | 59,858 | ||||||
Total liabilities and shareholders’ equity |
$ | 135,344 | $ | 120,966 | ||||
BLACKBAUD, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share data)
| Three months ended June 30, |
Six months ended June 30, |
||||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
||||||||||||||
Revenue |
|||||||||||||||||
License fees |
$ | 7,293 | $ | 5,671 | $ | 12,370 | $ | 10,175 | |||||||||
Services |
11,071 | 8,629 | 20,616 | 16,373 | |||||||||||||
Maintenance and subscriptions |
16,151 | 14,390 | 31,930 | 28,489 | |||||||||||||
Other revenue |
974 | 1,150 | 1,928 | 2,111 | |||||||||||||
Total revenue |
35,489 | 29,840 | 66,844 | 57,148 | |||||||||||||
Cost of revenue |
|||||||||||||||||
Cost of license fees |
951 | 890 | 1,680 | 1,457 | |||||||||||||
Cost of services (of which $273, $777, $567 and $1,399 in the three months
ended June 30, 2004 and 2003 and the six months ended June 30, 2004
and 2003 respectively, was stock option compensation expense) |
5,815 | 5,181 | 11,193 | 10,092 | |||||||||||||
Cost of maintenance and subscriptions (of which $25, $116, $62 and $209 in
the three months ended June 30, 2004 and 2003 and the six months ended
June 30, 2004 and 2003, respectively, was stock option compensation expense) |
2,738 | 2,972 | 5,398 | 5,806 | |||||||||||||
Cost of other revenue |
915 | 908 | 1,775 | 1,713 | |||||||||||||
Total cost of revenue |
10,419 | 9,951 | 20,046 | 19,068 | |||||||||||||
Gross profit
|
25,070 | 19,889 | 46,798 | 38,080 | |||||||||||||
Sales and marketing |
7,293 | 5,475 | 13,653 | 10,537 | |||||||||||||
Research and development |
4,428 | 3,585 | 8,704 | 7,204 | |||||||||||||
General and administrative |
3,061 | 2,529 | 5,912 | 5,352 | |||||||||||||
Amortization |
— | 85 | 32 | 133 | |||||||||||||
Costs of initial public offering |
700 | — | 1,650 | — | |||||||||||||
Stock option compensation |
526 | 5,768 | 1,193 | 11,214 | |||||||||||||
Total operating expenses |
16,008 | 17,442 | 31,144 | 34,440 | |||||||||||||
Income from operations
|
9,062 | 2,447 | 15,654 | 3,640 | |||||||||||||
Interest income |
29 | 22 | 54 | 48 | |||||||||||||
Interest expense |
(37 | ) | (759 | ) | (250 | ) | (1,622 | ) | |||||||||
Other (expense) income, net |
(3 | ) | 84 | 346 | 98 | ||||||||||||
Income before provision for income taxes |
9,051 | 1,794 | 15,804 | 2,164 | |||||||||||||
Income tax provision |
3,708 | 2,040 | 6,464 | 2,461 | |||||||||||||
Net income (loss) |
$ | 5,343 | $ | (246 | ) | $ | 9,340 | $ | (297 | ) | |||||||
Earnings (loss) per share |
|||||||||||||||||
Basic |
$ | 0.13 | $ | (0.01 | ) | $ | 0.22 | $ | (0.01 | ) | |||||||
Diluted |
$ | 0.12 | $ | (0.01 | ) | $ | 0.20 | $ | (0.01 | ) | |||||||
Common shares and equivalents outstanding |
|||||||||||||||||
Basic weighted average shares |
42,490,790 | 42,403,486 | 42,450,873 | 42,382,097 | |||||||||||||
Diluted weighted average shares |
45,983,687 | 42,403,486 | 45,943,846 | 42,382,097 | |||||||||||||
Stock option compensation included above is as follows: |
|||||||||||||||||
Cost of services |
$ | 273 | $ | 777 | $ | 567 | $ | 1,399 | |||||||||
Cost of recurring and subscription revenue |
25 | 116 | 62 | 209 | |||||||||||||
Total cost of revenue |
298 | 893 | 629 | 1,608 | |||||||||||||
Sales and marketing |
222 | 375 | 476 | 711 | |||||||||||||
Research and development |
142 | 560 | 316 | 1,016 | |||||||||||||
General and administrative |
162 | 4,833 | 401 | 9,487 | |||||||||||||
Total operating expense |
526 | 5,768 | 1,193 | 11,214 | |||||||||||||
Total stock option compensation expense |
$ | 824 | $ | 6,661 | $ | 1,822 | $ | 12,822 | |||||||||
BLACKBAUD, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
| Three Months ended June 30, |
Six Months ended June 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
Cash flows from operating activities |
||||||||||||||||
Net income (loss) |
$ | 5,343 | $ | (246 | ) | $ | 9,340 | $ | (297 | ) | ||||||
Adjustments to reconcile net income to net cash
provided by operating activities |
||||||||||||||||
Depreciation |
641 | 719 | 1,265 | 1,385 | ||||||||||||
Amortization of intangibles |
— | 85 | 32 | 133 | ||||||||||||
Stock option compensation |
824 | 7,084 | 1,822 | 12,821 | ||||||||||||
Amortization of deferred financing fees |
— | 234 | 156 | 468 | ||||||||||||
Deferred taxes |
2,208 | 1,374 | 4,248 | 1,409 | ||||||||||||
Changes in assets and liabilities, net of acquisition |
||||||||||||||||
Accounts receivable |
(8,329 | ) | (7,316 | ) | (8,355 | ) | (5,010 | ) | ||||||||
Prepaid expenses and other assets |
(400 | ) | (87 | ) | (278 | ) | (341 | ) | ||||||||
Trade accounts payable |
1,207 | (175 | ) | 344 | (882 | ) | ||||||||||
Accrued expenses and other current liabilities |
2,415 | 1,446 | 232 | (825 | ) | |||||||||||
Deferred revenue |
7,440 | 5,486 | 7,483 | 3,193 | ||||||||||||
Total adjustments |
6,006 | 8,850 | 6,949 | 12,351 | ||||||||||||
Net cash provided by operating
activities |
11,349 | 8,604 | 16,289 | 12,054 | ||||||||||||
Cash flows from investing activities |
||||||||||||||||
Purchase of property and equipment |
(493 | ) | (885 | ) | (1,188 | ) | (1,523 | ) | ||||||||
Purchase of net assets of acquired company |
(58 | ) | (547 | ) | (66 | ) | (547 | ) | ||||||||
Net cash used in investing activities |
(551 | ) | (1,432 | ) | (1,254 | ) | (2,070 | ) | ||||||||
Cash flows from financing activities |
||||||||||||||||
Repayments on long-term debt and capital
lease obligations |
(36 | ) | (8,058 | ) | (5,068 | ) | (16,068 | ) | ||||||||
Proceeds
from exercise of stock options |
368 | 233 | 480 | 233 | ||||||||||||
Net cash used in financing activities |
332 | (7,825 | ) | (4,588 | ) | (15,835 | ) | |||||||||
Effect of exchange rate on cash and cash equivalents |
(364 | ) | (48 | ) | (304 | ) | (157 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents |
10,766 | (701 | ) | 10,143 | (6,008 | ) | ||||||||||
Cash and cash equivalents, beginning of year |
6,085 | 13,397 | 6,708 | 18,703 | ||||||||||||
Cash and cash equivalents, end of year |
$ | 16,851 | $ | 12,696 | $ | 16,851 | $ | 12,695 | ||||||||
Noncash activities |
||||||||||||||||
Change in fair value of derivative instruments |
$ | — | $ | 121 | $ | — | $ | 232 | ||||||||
BLACKBAUD, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
(In thousands, except share and per share amounts)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, |
June 30, |
|||||||||||||||
| 2004 |
2003 |
2004 |
2003 |
|||||||||||||
GAAP revenue |
$ | 35,489 | $ | 29,840 | $ | 66,844 | $ | 57,148 | ||||||||
GAAP gross margin |
$ | 25,070 | $ | 19,889 | $ | 46,798 | $ | 38,080 | ||||||||
Pro forma adjustments: |
||||||||||||||||
Amortization of deferred stock compensation |
298 | 893 | 629 | 1608 | ||||||||||||
Pro forma gross profit |
$ | 25,368 | $ | 20,782 | $ | 47,427 | $ | 39,688 | ||||||||
Pro forma gross margin |
71 | % | 70 | % | 71 | % | 69 | % | ||||||||
GAAP income from operations |
$ | 9,062 | $ | 2,447 | $ | 15,654 | $ | 3,640 | ||||||||
Pro forma adjustments: |
||||||||||||||||
Amortization of deferred stock compensation |
824 | 6,661 | 1,822 | 12,822 | ||||||||||||
Costs of initial public offering |
700 | — | 1,650 | — | ||||||||||||
Total pro forma adjustments |
1,524 | 6,661 | 3,472 | 12,822 | ||||||||||||
Pro forma income from operations |
$ | 10,586 | $ | 9,108 | $ | 19,126 | $ | 16,462 | ||||||||
Pro forma operating margin |
30 | % | 31 | % | 29 | % | 29 | % | ||||||||
GAAP net income(loss) |
$ | 5,343 | $ | (246 | ) | $ | 9,340 | $ | (297 | ) | ||||||
Pro forma adjustments: |
||||||||||||||||
Total pro forma adjustments affecting income from operations |
1,524 | 6,661 | 3,472 | 12,822 | ||||||||||||
Tax impact related to pro forma adjustments |
(419 | ) | (1,142 | ) | (1,056 | ) | (3,180 | ) | ||||||||
Pro forma net income |
$ | 6,448 | $ | 5,273 | $ | 11,756 | $ | 9,345 | ||||||||
GAAP shares used in computing diluted income(loss) per share |
45,984 | 42,403 | 45,944 | 42,382 | ||||||||||||
Pro forma adjustments: |
||||||||||||||||
Incremental shares related to stock options |
(198 | ) | 2,377 | (175 | ) | 1,934 | ||||||||||
Shares used in computing proforma earnings per diluted share |
45,786 | 44,780 | 45,769 | 44,316 | ||||||||||||
Pro forma earnings per diluted share |
$ | 0.14 | $ | 0.12 | $ | 0.26 | $ | 0.21 | ||||||||
INVESTOR CONTACT:
|
Tim Dolan Integrated Corporate Relations 203-682-8200 |
|
MEDIA CONTACT:
|
Megan McDonnell Integrated Corporate Relations 203-682-8200 |
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SOURCE:
|
Blackbaud, Inc. |