Attached files
file | filename |
---|---|
8-K - FORM 8-K - BLACKBOARD INC | w79462e8vk.htm |
EX-10.1 - EX-10.1 - BLACKBOARD INC | w79462exv10w1.htm |
Exhibit 99.2
News Release
Blackboard Inc. Reports Second Quarter Revenue of $107.7 Million
Blackboard Completes Acquisitions of Elluminate, Inc. and Wimba, Inc.
Blackboard Announces $175 Million Credit Facility
Washington, DC August 9, 2010 Blackboard Inc. (NASDAQ: BBBB) today announced financial
results for the second quarter ended June 30, 2010 and updated guidance for the third quarter and
the full year of 2010.
Total revenue for the quarter ended June 30, 2010 was $107.7 million, an increase of 17 percent
over the second quarter of 2009. Product revenues for the quarter were $97.5 million, an increase
of 17 percent over the second quarter of 2009, while professional services revenues for the quarter
were $10.3 million, an increase of 17 percent over the second quarter of 2009.
GAAP net income was $4.4 million, resulting in net income per basic and diluted share of $0.13 per
share for the second quarter of 2010 compared to a net loss of $4.1 million or a net loss per basic
and diluted share of ($0.13) per share for the second quarter of 2009. Non-GAAP adjusted net income
for the second quarter of 2010, which excludes the amortization of acquisition-related intangible
assets, stock-based compensation, and non-cash interest expense, all net of taxes, was $14.0
million, resulting in non-GAAP adjusted net income per diluted share of $0.40 compared to non-GAAP
adjusted net income of $8.7 million or $0.27 per diluted share for the second quarter of 2009.
I am pleased that once again we have delivered strong financial results including solid revenue
and earnings growth, said Michael Chasen, chief executive officer and president of Blackboard.
With our range of products and services, including new technologies from the acquisitions of
Elluminate and Wimba, we are well positioned to continue to meet the expanding needs of the global
education market.
Highlights from the Second Quarter of 2010
| A few of Blackboards new and expanded client relationships in the quarter included: |
| U.S. Higher Education: Anne Arundel Community College, Cecil Community College, Drake University, Duquesne University, Fairfield University, Florida Atlantic University, George Mason University, Greenville Technical College, Hawaii Pacific University, Liberty |
University, Lorain County Community College, Loyola University Chicago, Northwestern University, Ohio Board of Regents, University of Kentucky, University of North Texas, University of Pittsburgh, Xavier University and others. | |||
| International: BPP Group, Cardiff University, Henley College Coventry, INHOLLAND University, Insper Instituto de Ensino e Pesquisa, Linnaeus University, London South Bank University, Middlesbrough College, Middlesex University, Newcastle College, Northumberland College, Sheffield Hallam University, St. Bedes School, UCSYD, Universidad Javeriana, University of Leicester, University of Manchester, University of Sheffield and others. | ||
| K-12: Cabot School District, Cobb County School District, Corona-Norco Unified School District, eTech Ohio, Fairfax County Public Schools, Florida Virtual School, Franklin-McKinley School District, Leyden School District, Orleans Parrish Schools, Ottawa Catholic School Board, Polk County Public Schools, Poudre Valley School District, Roanoke County Public Schools, Southern Westchester BOCES, Strathcona-Tweedsmuir School, Talbot County School District, Thomasville City School, Volusia County Public Schools and others. | ||
| Professional Education (ProEd): American Technical Publishers, American University of Antigua College of Medicine, Berkeley Educational Services, Capitol College, College America Services, Grand Canyon University, LIM College, National University, South Carolina Educational Television, St. Louis College of Heath Careers, Uniformed Services University of the Health Sciences and others. |
| Blackboard launched Blackboard Mobile Learn for Android, BlackBerry®, iPad® and iPhone® OS powered devices that give millions of students instant access to their course information directly from their smartphones. This new application recreates the course experience of Blackboard Learn, the leading online teaching and learning platform, and lets students check grades and assignments, add discussion board comments and blog posts, email instructors and classmates and much more. | ||
| Blackboard announced a major update for its flagship software with the launch of Blackboard Learn, Release 9.1, which integrates a range of social learning tools and drives student engagement. The release also introduces important new features for K-12 teachers and learners, including lesson planning and standards alignment. | ||
| Blackboard earned one of the software industrys top honors this quarter when its online learning platform was named Best Course Management Solution in the Software & Information Industry Associations (SIIA) 2010 CODiE Awards. | ||
| The Ohio Board of Regents selected Blackboard to help develop the plan for establishing a new, statewide digital learning clearinghouse to help increase the number of Ohio students that attend and graduate from college and, in turn, strengthen the states overall workforce and economy. |
Blackboard Completes Acquisitions of Elluminate, Inc. and Wimba, Inc.
Blackboard announced today that it has closed the acquisitions of Elluminate, Inc. and Wimba, Inc.,
two of the leading providers of synchronous learning and collaboration technology to the education
markets, for a total of approximately $120 million in cash, excluding transaction costs.
These leading teams and solutions together will form Blackboard Collaborate, the newest standalone
platform in the Companys family of education solutions. Blackboard, combined with the teams from
Elluminate and Wimba, will pursue greater innovation to meet growing needs in the area of
synchronous learning and collaboration, including continued support for integrations with open
source applications and other commercial learning management systems (LMS).
Outlook for the Third Quarter and Full Year of 2010
Blackboards current financial guidance for the third quarter and full year of 2010 is inclusive of
the acquisitions of Elluminate, Inc. and Wimba, Inc.
Third Quarter of 2010:
| Revenue of $118.6 million to $122.6 million; | ||
| Amortization of acquired intangibles of approximately $9.8 million; | ||
| Stock-based compensation expense of approximately $5.1 million; | ||
| GAAP net income of $4.1 million to $6.5 million, | ||
| GAAP net income per diluted share of $0.12 to $0.19, which is based on an estimated 35.0 million diluted shares and an estimated effective tax rate of approximately 32.0 percent; | ||
| Non-GAAP adjusted net income of $14.0 to $16.4 million, which excludes the amortization of acquisition-related intangible assets, stock-based compensation expense, and non-cash interest expense, all net of taxes; and | ||
| Non-GAAP adjusted net income per diluted share of $0.40 to $0.47 based on an estimated 35.0 million diluted shares and an estimated effective tax rate of approximately 37.5 percent. |
Full Year 2010:
| Revenue of $441.4 to $449.4 million; | ||
| Amortization of acquired intangibles of approximately $38.4 million; | ||
| Stock-based compensation expense of approximately $20.6 million; | ||
| GAAP net income of $12.5 to $17.2 million, | ||
| GAAP net income per diluted share of $0.36 to $0.49, which is based on an estimated 34.9 million diluted shares and an estimated effective tax rate of approximately 29.0 percent; |
| Non-GAAP adjusted net income of $51.8 to $56.6 million, which excludes the amortization of acquisition-related intangible assets, stock-based compensation expense, and non-cash interest expense, all net of taxes; | ||
| Non-GAAP adjusted net income per diluted share of $1.48 to $1.62 based on an estimated 34.9 million diluted shares and an estimated effective tax rate of approximately 37.0 percent; | ||
| Free cash flow from operations (cash flow from operations less purchases of property and equipment) of $75.0 to $85.0 million. |
Blackboard Announces $175 Million Credit Facility
Blackboard announced today it has established a $175 million credit facility with a group of
lenders. The Company has not drawn on the facility. Proceeds from the facility will be used for
general corporate purposes which may include share purchases, repayment of other debt and
acquisitions. Additional details about the facility will be included on a Form 8-K to be filed with
the Securities and Exchange Commission. The Credit Agreement provides for the following terms:
| Revolving credit facility with $175 million in commitments from a group of nine lenders; | ||
| Expansion feature permitting additional revolving or term loan commitments of up to $50 million; | ||
| 5-year facility with a maturity date of August 4, 2015. |
JPMorgan Securities Inc. acted as the Sole Bookrunner and Sole Lead Arranger of the oversubscribed
financing. JPMorgan Chase Bank, N.A. is acting as Administrative Agent, Citibank, NA and Credit
Suisse AG acted as Co-Syndication Agents and PNC Bank, N.A. and Wells Fargo Bank, N.A. acted as
Co-Documentation Agents for the bank syndication that includes: Silicon Valley Bank, SunTrust Bank,
M&T Bank and Bank of America, N.A as lenders.
Conference Call
Blackboard will broadcast its second quarter conference call live over the Internet today beginning
at 4:30 p.m. (Eastern). Interested parties can access the webcast through the Investor Relations
section of the Companys Web site at
http://investor.blackboard.com.
A replay of the call will be available via telephone at approximately 7:00 p.m. (ET) on August 9,
2010. To listen to the replay, participants in the U.S. and Canada should dial 888-286-8010, and
international participants should dial +1 (617) 801-6888. The conference ID for the replay is
75542315.
BLACKBOARD INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(in thousands, except per share amounts)
December 31, | June 30, | |||||||
2009 | 2010 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 167,353 | $ | 137,284 | ||||
Accounts receivable, net |
69,098 | 85,003 | ||||||
Inventories |
1,557 | 228 | ||||||
Prepaid expenses and other current assets |
15,232 | 17,828 | ||||||
Deferred tax asset, current portion |
2,692 | 66 | ||||||
Deferred cost of revenues |
7,664 | 5,509 | ||||||
Total current assets |
263,596 | 245,918 | ||||||
Deferred tax asset, noncurrent portion |
18,188 | 17,136 | ||||||
Investment in common stock warrant |
3,124 | 3,124 | ||||||
Restricted cash |
3,923 | 3,863 | ||||||
Property and equipment, net |
34,483 | 37,796 | ||||||
Other assets |
1,453 | 967 | ||||||
Goodwill |
328,858 | 355,329 | ||||||
Intangible assets, net |
71,309 | 74,107 | ||||||
Total assets |
$ | 724,934 | $ | 738,240 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 2,360 | $ | 3,990 | ||||
Accrued expenses |
28,264 | 33,954 | ||||||
Deferred rent, current portion |
1,021 | 480 | ||||||
Deferred tax liability, current portion |
| 543 | ||||||
Deferred revenues, current portion |
186,702 | 144,545 | ||||||
Total current liabilities |
218,347 | 183,512 | ||||||
Notes payable, net of debt discount |
156,177 | 159,242 | ||||||
Deferred rent, noncurrent portion |
11,507 | 11,792 | ||||||
Deferred tax liability, noncurrent portion |
1,474 | 1,695 | ||||||
Deferred revenues, noncurrent portion |
5,957 | 4,722 | ||||||
Stockholders equity: |
||||||||
Common stock, $0.01 par value |
331 | 343 | ||||||
Additional paid-in capital |
406,751 | 443,148 | ||||||
Accumulated deficit |
(75,610 | ) | (66,214 | ) | ||||
Total stockholders equity |
331,472 | 377,277 | ||||||
Total liabilities and stockholders equity |
$ | 724,934 | $ | 738,240 | ||||
BLACKBOARD INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
(in thousands, except share and per share amounts)
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
2009 | 2010 | 2009 | 2010 | |||||||||||||
Revenues: |
||||||||||||||||
Product |
$ | 83,381 | $ | 97,474 | $ | 163,507 | $ | 191,204 | ||||||||
Professional services |
8,729 | 10,254 | 15,051 | 17,590 | ||||||||||||
Total revenues |
92,110 | 107,728 | 178,558 | 208,794 | ||||||||||||
Operating expenses: |
||||||||||||||||
Cost of product revenues, excludes $2,034 and $2,816
for the three months ended June 30, 2009 and 2010,
respectively, and $5,672 and $5,324 for the six months
ended June 30, 2009 and 2010, respectively, in
amortization of acquired technology included in
amortization of intangibles resulting from
acquisitions shown below (1) |
21,762 | 27,409 | 43,207 | 51,943 | ||||||||||||
Cost of professional services revenues (1) |
4,703 | 5,386 | 9,470 | 9,865 | ||||||||||||
Research and development (1) |
11,219 | 12,047 | 22,045 | 24,252 | ||||||||||||
Sales and marketing (1) |
25,771 | 27,930 | 49,713 | 53,245 | ||||||||||||
General and administrative (1) |
14,238 | 16,851 | 27,840 | 31,556 | ||||||||||||
Patent related impairment and other costs |
10,984 | | 10,984 | | ||||||||||||
Amortization of intangibles resulting from acquisitions |
7,861 | 9,359 | 16,446 | 18,337 | ||||||||||||
Total operating expenses |
96,538 | 98,982 | 179,705 | 189,198 | ||||||||||||
(Loss) income from operations |
(4,428 | ) | 8,746 | (1,147 | ) | 19,596 | ||||||||||
Other expense, net: |
||||||||||||||||
Interest expense |
(2,971 | ) | (2,908 | ) | (5,862 | ) | (5,796 | ) | ||||||||
Interest income |
59 | 50 | 167 | 71 | ||||||||||||
Other income (expense), net |
1,361 | (379 | ) | 802 | (906 | ) | ||||||||||
(Loss) income before benefit (provision) for income taxes |
(5,979 | ) | 5,509 | (6,040 | ) | 12,965 | ||||||||||
Benefit (provision) for income taxes |
1,907 | (1,149 | ) | 1,930 | (3,569 | ) | ||||||||||
Net (loss) income |
$ | (4,072 | ) | $ | 4,360 | $ | (4,110 | ) | $ | 9,396 | ||||||
Net (loss) income per common share: |
||||||||||||||||
Basic |
$ | (0.13 | ) | $ | 0.13 | $ | (0.13 | ) | $ | 0.28 | ||||||
Diluted |
$ | (0.13 | ) | $ | 0.13 | $ | (0.13 | ) | $ | 0.27 | ||||||
Weighted average number of common shares: |
||||||||||||||||
Basic |
31,920,282 | 34,128,218 | 31,571,009 | 33,798,698 | ||||||||||||
Diluted |
31,920,282 | 34,769,318 | 31,571,009 | 34,629,788 | ||||||||||||
(1) Includes the following amounts related to stock-based compensation: |
||||||||||||||||
Cost of product revenues |
$ | 307 | $ | 264 | $ | 576 | $ | 607 | ||||||||
Cost of professional services revenues |
169 | 149 | 259 | 297 | ||||||||||||
Research and development |
258 | 296 | 485 | 563 | ||||||||||||
Sales and marketing |
1,541 | 1,858 | 3,124 | 3,721 | ||||||||||||
General and administrative |
1,676 | 2,500 | 3,495 | 4,835 | ||||||||||||
Reconciliation of GAAP net (loss) income before benefit (provision) for income taxes to Non-GAAP adjusted net income (2): | ||||||||||||||||
GAAP Net (loss) income before benefit (provision) for income taxes |
$ | (5,979 | ) | $ | 5,509 | $ | (6,040 | ) | $ | 12,965 | ||||||
Add: Non-cash patent related impairment |
7,447 | | 7,447 | | ||||||||||||
Add: Amortization of intangibles resulting from acquisitions |
7,861 | 9,359 | 16,446 | 18,337 | ||||||||||||
Add: Stock-based compensation |
3,951 | 5,067 | 7,939 | 10,023 | ||||||||||||
Add: Non-cash interest expense |
1,563 | 1,537 | 3,118 | 3,065 | ||||||||||||
Adjusted provision for income taxes (3) |
(6,109 | ) | (7,454 | ) | (11,526 | ) | (15,982 | ) | ||||||||
Non-GAAP adjusted net income |
$ | 8,734 | $ | 14,018 | $ | 17,384 | $ | 28,408 | ||||||||
Non-GAAP adjusted net income per common share diluted |
$ | 0.27 | $ | 0.40 | $ | 0.54 | $ | 0.82 | ||||||||
Weighted average number of diluted common shares |
32,585,621 | 34,769,318 | 32,206,099 | 34,629,788 | ||||||||||||
(2) | Non-GAAP adjusted net income and non-GAAP adjusted net income per share are non-GAAP financial measures and have no standardized measurement prescribed by GAAP. Management believes that both measures provide additional useful information to investors regarding the Companys ongoing financial condition and results of operations and since the Company has historically reported these non-GAAP results they provide an additional basis for comparisons to prior periods. The non-GAAP financial measures may not be comparable with similar non-GAAP financial measures used by other companies and should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The Company provides the above reconciliation to the most directly comparable GAAP financial measure to allow investors to appropriately consider each non-GAAP financial measure. | |
(3) | Adjusted provision for income taxes is applied at an effective rate of approximately 41.2% and 34.7% for the three months ended June 30, 2009 and 2010, respectively, and approximately 39.9% and 36.0% for the six months ended June 30, 2009 and 2010, respectively. |
BLACKBOARD INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(in thousands)
Six Months Ended | ||||||||
June 30 | ||||||||
2009 | 2010 | |||||||
Cash flows from operating activities |
||||||||
Net (loss) income |
$ | (4,110 | ) | $ | 9,396 | |||
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: |
||||||||
Deferred income tax benefit |
(3,964 | ) | 1,266 | |||||
Excess tax benefits from stock-based compensation |
(272 | ) | (2,799 | ) | ||||
Amortization of debt discount |
3,118 | 3,065 | ||||||
Depreciation and amortization |
9,188 | 9,537 | ||||||
Amortization of intangibles resulting from acquisitions |
16,446 | 18,337 | ||||||
Patent related impairment charge |
7,447 | | ||||||
Change in allowance for doubtful accounts |
(1,123 | ) | (120 | ) | ||||
Stock-based compensation |
7,939 | 10,023 | ||||||
Gain on investment in common stock warrant |
(1,136 | ) | | |||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
8,436 | (15,317 | ) | |||||
Inventories |
108 | 1,329 | ||||||
Prepaid expenses and other current assets |
(4,812 | ) | (2,512 | ) | ||||
Deferred cost of revenues |
(281 | ) | 2,156 | |||||
Accounts payable |
3,846 | 171 | ||||||
Accrued expenses |
1,329 | 8,384 | ||||||
Deferred rent |
581 | (256 | ) | |||||
Deferred revenues |
(28,886 | ) | (46,227 | ) | ||||
Net cash provided by (used in) operating activities |
13,854 | (3,567 | ) | |||||
Cash flows from investing activities |
||||||||
Acquisitions, net of cash acquired |
(86,164 | ) | (40,158 | ) | ||||
Purchases of property and equipment |
(12,940 | ) | (12,791 | ) | ||||
Purchase of available-for-sale securities |
(6,586 | ) | | |||||
Redemptions of available-for-sale securities |
6,586 | | ||||||
Payments for patent enforcement costs |
(414 | ) | | |||||
Net cash used in investing activities |
(99,518 | ) | (52,949 | ) | ||||
Cash flows from financing activities |
||||||||
Release of letter of credit |
80 | 61 | ||||||
Excess tax benefits from stock-based compensation |
272 | 2,799 | ||||||
Proceeds from exercise of stock options |
2,257 | 23,587 | ||||||
Net cash provided by financing activities |
2,609 | 26,447 | ||||||
Net decrease in cash and cash equivalents |
(83,055 | ) | (30,069 | ) | ||||
Cash and cash equivalents at beginning of period |
141,746 | 167,353 | ||||||
Cash and cash equivalents at end of period |
$ | 58,691 | $ | 137,284 | ||||
About Blackboard Inc.
Blackboard Inc. (NASDAQ: BBBB) is a global leader in enterprise technology and innovative solutions
that improve the experience of millions of students and learners around the world every day.
Blackboards solutions allow thousands of higher education, K-12, professional, corporate, and
government organizations to extend teaching and learning online, facilitate campus commerce and
security, and communicate more effectively with their communities. Founded in 1997, Blackboard is
headquartered in Washington, D.C., with offices in North America, Europe, Asia and Australia.
Blackboard
Educate. Innovate. Everywhere.
Any statements in this press release about future expectations, plans and prospects for Blackboard
and other statements containing the words believes, anticipates, plans, expects, will,
and similar expressions, constitute forward-looking statements within the meaning of The Private
Securities Litigation Reform Act of 1995. These forward looking statements include statements about
our expected financial results for the third quarter of 2010 and the full year 2010 and other
statements about our future financial performance. Actual results may differ materially from those
indicated by such forward-looking statements as a result of various important factors, including
the factors discussed in the Risk Factors section of our Form 10-Q filed on August 9, 2010 with
the SEC. In addition, the forward-looking statements included in this press release represent the
Companys views as of August 9, 2010. The Company anticipates that subsequent events and
developments will cause the Companys views to change. However, while the Company may elect to
update these forward-looking statements at some point in the future, the Company specifically
disclaims any obligation to do so. These forward-looking statements should not be relied upon as
representing the Companys views as of any date subsequent to August 9, 2010.
Use of Non-GAAP Financial Measures
This release includes information about the Companys non-GAAP adjusted net income and non-GAAP
adjusted net income per share, which are non-GAAP financial measures. Management believes that both
measures, which exclude the amortization or impairment of intangible assets, stock-based
compensation, and non-cash interest expense, provide additional useful information to investors
regarding the Companys ongoing financial condition and results of operations and aspects of
current operating performance that can be effectively managed. Because the Company has historically
reported these non-GAAP results to the investment community, management also believes the inclusion
of these non-GAAP financial measures provides enhanced comparability in its financial reporting and
facilitates investors understanding of the Companys historic operating trends by providing an
additional basis for comparisons to prior periods. In addition, the Companys internal reporting,
including information provided to the Companys Audit Committee and Board of Directors, contains
non-GAAP measures. The Company has also adopted internal compensation metrics that are determined
on a basis that excludes amortization of acquired intangibles and the associated tax impact, and in
2010 also
excludes stock-based compensation expense, non-cash patent related impairment charges, non-cash
interest expense and other items as determined by the Board of Directors.
A material limitation associated with the use of the above non-GAAP financial measures is that they
have no standardized measurement prescribed by GAAP and may not be comparable with similar non-GAAP
financial measures used by other companies. The Company compensates for these limitations by
providing full disclosure of each non-GAAP financial measure and reconciliation to the most
directly comparable GAAP financial measure which investors can use to appropriately consider each
financial measure determined under GAAP as well as on the adjusted non-GAAP basis. However, the
non-GAAP financial measures should not be considered in isolation from, or as a substitute for,
financial information prepared in accordance with GAAP. In addition to the information contained in
this release, investors should also review information contained in the Companys Form 10-Q dated
August 9, 2010, as well as other filings with the Securities and Exchange Commission when assessing
the Companys financial condition and results of operations.
Contacts:
For Financial Media and Investors:
Michael J. Stanton
Senior Vice President, Investor Relations
Blackboard Inc.
+1 (202) 463-4860 ext. 2305
Michael J. Stanton
Senior Vice President, Investor Relations
Blackboard Inc.
+1 (202) 463-4860 ext. 2305
Staci Strauss Mortenson
Senior Vice President
ICR
+1 (203) 682-8273
Senior Vice President
ICR
+1 (203) 682-8273
For Education & General Media:
Matthew Maurer
Director, Public Relations
+1 (202) 463-4860 ext. 2637
matthew.maurer@blackboard.com
Matthew Maurer
Director, Public Relations
+1 (202) 463-4860 ext. 2637
matthew.maurer@blackboard.com
# # #