Attached files
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| 8-K - 8-K - BLACKBAUD INC | form8-k2015q2.htm |
Exhibit 99.1 | ||
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PRESS RELEASE | ||
Blackbaud, Inc. Announces Second Quarter 2015 Results
Achieves 12.1% Revenue Growth; Recurring Revenue Increases To 75.9% Of Total Revenue;
Updates Full-Year Financial Guidance
Charleston, S.C. (July 29, 2015) - Blackbaud, Inc. (NASDAQ:BLKB), a leading global provider of software and services for the nonprofit, charitable giving and education communities, today announced financial results for its second quarter ended June 30, 2015.
Second Quarter 2015 Highlights
• | Total revenue growth of 12.1% to $156.3 million |
• | Non-GAAP organic revenue growth of 5.6%; 7.2% in constant currency |
• | Recurring revenue increased to 75.9% of total revenue |
• | Total subscriptions revenue growth of 23.1% to $80.0 million |
President and CEO, Mike Gianoni, commented, "We are very pleased with our revenue and profitability results for the quarter and year to date. Our subscription revenue is now more than half of company revenues and reflects our strategic transition to the cloud. Our recent announcement of the general availability of our newest cloud-based offering, Raiser’s Edge NXT, illustrates our commitment to this strategy."
“We continued to focus on executing the key programs within our five growth strategies. Our organic revenue growth and improved operating margin reflects the results of our investments and actions," concluded Mr. Gianoni.
Second Quarter 2015 GAAP Financial Results
Blackbaud generated total revenue of $156.3 million in the second quarter of 2015, an increase of 12.1% compared to $139.4 million in the second quarter of 2014. Income from operations and net income were $14.5 million and $7.0 million, respectively, compared to $16.0 million and $9.3 million, respectively, in the second quarter of 2014. Diluted earnings per share was $0.15 in the second quarter of 2015, compared to $0.20 in the same period last year.
Total revenue, income from operations and net income were positively impacted in the second quarter from growth in subscriptions revenue and contributions from acquisitions completed in June and October of 2014. The positive impacts to income from operations and net income were offset by increased amortization of intangible assets arising from those acquisitions as well as increased stock-based compensation. The loss from the sale of a business during the second quarter of 2015 also negatively impacted net income.
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PRESS RELEASE | ||
Second Quarter 2015 Non-GAAP Financial Results
Blackbaud achieved non-GAAP revenue of $158.7 million and non-GAAP organic revenue growth of 5.6% in the second quarter of 2015. On a constant currency basis, non-GAAP organic revenue growth was 7.2% in the second quarter of 2015. Non-GAAP organic revenue growth includes $11.2 million of incremental non-GAAP revenue in the second quarter of 2014 associated with acquired companies, as if the companies were combined throughout the prior period. Non-GAAP organic revenue growth excludes $0.2 million of revenue in the second quarter of 2014 associated with a business divested of in the current fiscal year, in order to present the results of the divested business within the results of the combined company for the same period of time in both the prior and current periods.
Non-GAAP income from operations increased 21.1% to $32.7 million in the second quarter of 2015, compared to $27.0 million in the same period last year. Non-GAAP net income increased 21.6% to $19.2 million for the second quarter of 2015 compared to $15.8 million in the same period last year. Non-GAAP diluted earnings per share was $0.41 for the second quarter of 2015, up from $0.35 per diluted share in the same period last year. An explanation of these measures is included below under the heading "Non-GAAP Financial Measures."
Non-GAAP income from operations and non-GAAP net income were positively impacted in the second quarter by growth in subscriptions revenue and contributions from acquisitions completed in 2014.
Executive Vice President and CFO, Tony Boor, commented, "We are continuing to see the real benefits of our investments, our product integration and our operational improvement initiatives. Our non-GAAP operating margin of 20.6% is a 120 basis point improvement over the same quarter last year. We continue to maintain a strong balance sheet and cash flow, which we believe positions the company well for continued investments to drive increased growth over the long-term."
Full-Year Financial Guidance Update
Blackbaud announced today that it is updating its 2015 full-year financial guidance:
• | Non-GAAP revenue of $635.0 million to $645.0 million; |
• | Non-GAAP income from operations of $118.0 million to $122.0 million; |
• | Non-GAAP operating margin of 18.6% to 18.9%; |
• | Non-GAAP diluted earnings per share of $1.47 to $1.53; and |
• | Cash flow from operations of $115.0 million to $125.0 million. |
The updates were a result of the company's better than originally expected second quarter and year to date financial performance.
Balance Sheet and Cash Flow
The company ended the second quarter with $13.2 million of cash and cash equivalents, compared to $13.3 million on March 31, 2015. The company generated $43.3 million in cash flow from operations during the second quarter, reduced net borrowings by $28.2 million, returned $5.6 million to stockholders by way of dividend and had cash outlays of $8.3 million for capital expenditures and capitalized software.
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PRESS RELEASE | ||
Dividend
Blackbaud announced today that its Board of Directors has approved a third quarter 2015 dividend of $0.12 per share payable on September 15, 2015 to stockholders of record on August 28, 2015.
Conference Call Details
Blackbaud will host a conference call tomorrow, July 30, 2015, at 8:00 a.m. (Eastern Time) to discuss the company's financial results, operations and related matters. To access this call, dial 1-888-505-4389 (domestic) or 1-719-457-2663 (international) and enter passcode 191851. To access a replay of this conference call, which will be available through August 12, 2015, dial 1-888-203-1112 (domestic) or 1-719-457-0820 (international), and enter passcode 9095162. A live webcast of this conference call will be available on the "Investor Relations" page of the company's website at www.blackbaud.com/investorrelations and a replay will be archived on the website as well.
Investors and others should note that we announce material financial information to our investors using our website, www.blackbaud.com, SEC filings, press releases, public conference calls and webcasts. We use these channels as well as social media to communicate with our customers and the public about our company, our services and other issues. It is possible that the information we post on social media could be deemed material information. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the social media channels listed on the “Investor Relations” page of the company’s website at www.blackbaud.com/investorrelations.
About Blackbaud
Serving the nonprofit, charitable giving and education communities for more than 30 years, Blackbaud (NASDAQ:BLKB) combines technology solutions and expertise to help organizations achieve their missions. Blackbaud works in over 60 countries to support more than 30,000 customers, including nonprofits, K12 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, and related services for organizations of all sizes, including nonprofit fundraising and relationship management, eMarketing, advocacy, accounting, payments and analytics, as well as grant management, corporate social responsibility, education and other solutions. 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.
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PRESS RELEASE | ||
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: our projected 2015 full year financial results, expectations that our strategic product transitions will result in continued growth in subscriptions revenue; expectations for continuing to execute and benefit from our five growth and operational improvement strategies; and expectations that past investments will continue to yield revenue growth, operational efficiencies and improved operating margins. 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, non-GAAP diluted earnings per share, EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin. 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 our 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 we believe 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 we believe are not directly related to our performance in any particular period, but are for our long-term benefit over multiple periods.
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PRESS RELEASE | ||
In addition, we discuss non-GAAP organic revenue growth and non-GAAP organic revenue growth on a constant currency basis, which we believe provide useful information for evaluating the periodic growth of our 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 or stub period 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. We believe this presentation provides a more comparable representation of our current business’ organic revenue growth and revenue run-rate. To determine non-GAAP organic revenue growth on a constant currency basis for second quarter of 2015, revenues from entities reporting in foreign currencies were translated into U.S. dollars using the comparable prior year period's quarterly weighted average foreign currency exchange rates which resulted in $2.4 million of incremental non-GAAP revenue for the second quarter of 2015. Details of our 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.
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 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. These non-GAAP financial measures are not completely comparable to similarly titled measures of other companies due to differences in the exact method of calculation between companies. In addition, 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. A reconciliation of our 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.
Investor Contact:
Jagtar Narula
Blackbaud, Inc.
843-654-2164
jagtar.narula@blackbaud.com
Media Contact:
Nicole McGougan
Blackbaud, Inc.
843-654-3307
nicole.mcgougan@blackbaud.com
Blackbaud, Inc.
Consolidated balance sheets
(Unaudited)
(in thousands, except share amounts) | June 30, 2015 | December 31, 2014 | |||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 13,227 | $ | 14,735 | |||
Donor restricted cash | 61,055 | 140,709 | |||||
Accounts receivable, net of allowance of $4,433 and $4,539 at June 30, 2015 and December 31, 2014, respectively | 87,462 | 77,523 | |||||
Prepaid expenses and other current assets | 41,628 | 40,392 | |||||
Deferred tax asset, current portion | 11,967 | 14,423 | |||||
Total current assets | 215,339 | 287,782 | |||||
Property and equipment, net | 48,960 | 50,402 | |||||
Goodwill | 345,873 | 349,008 | |||||
Intangible assets, net | 212,596 | 229,307 | |||||
Other assets | 32,592 | 26,684 | |||||
Total assets | $ | 855,360 | $ | 943,183 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Trade accounts payable | $ | 18,100 | $ | 11,436 | |||
Accrued expenses and other current liabilities | 45,357 | 52,201 | |||||
Donations payable | 61,055 | 140,709 | |||||
Debt, current portion | 4,375 | 4,375 | |||||
Deferred revenue, current portion | 225,076 | 212,283 | |||||
Total current liabilities | 353,963 | 421,004 | |||||
Debt, net of current portion | 253,130 | 276,196 | |||||
Deferred tax liability | 37,469 | 43,639 | |||||
Deferred revenue, net of current portion | 8,796 | 8,991 | |||||
Other liabilities | 6,747 | 7,437 | |||||
Total liabilities | 660,105 | 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, 56,658,529 and 56,048,135 shares issued at June 30, 2015 and December 31, 2014, respectively | 57 | 56 | |||||
Additional paid-in capital | 257,996 | 245,674 | |||||
Treasury stock, at cost; 9,790,192 and 9,740,054 shares at June 30, 2015 and December 31, 2014, respectively | (192,665 | ) | (190,440 | ) | |||
Accumulated other comprehensive loss | (1,926 | ) | (1,032 | ) | |||
Retained earnings | 131,793 | 131,658 | |||||
Total stockholders’ equity | 195,255 | 185,916 | |||||
Total liabilities and stockholders’ equity | $ | 855,360 | $ | 943,183 | |||
Blackbaud, Inc.
Consolidated statements of comprehensive income
(Unaudited)
(in thousands, except share and per share amounts) | Three months ended June 30, | Six months ended June 30, | |||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
Revenue | |||||||||||||
Subscriptions | $ | 80,009 | $ | 64,985 | $ | 152,522 | $ | 123,253 | |||||
Maintenance | 38,627 | 36,527 | 77,523 | 72,179 | |||||||||
Services | 33,667 | 31,795 | 64,973 | 59,925 | |||||||||
License fees and other | 3,956 | 6,081 | 8,234 | 11,653 | |||||||||
Total revenue | 156,259 | 139,388 | 303,252 | 267,010 | |||||||||
Cost of revenue | |||||||||||||
Cost of subscriptions | 39,400 | 31,749 | 75,578 | 61,873 | |||||||||
Cost of maintenance | 6,969 | 5,983 | 14,471 | 11,397 | |||||||||
Cost of services | 25,915 | 25,540 | 52,886 | 51,803 | |||||||||
Cost of license fees and other | 1,146 | 1,424 | 2,307 | 2,953 | |||||||||
Total cost of revenue | 73,430 | 64,696 | 145,242 | 128,026 | |||||||||
Gross profit | 82,829 | 74,692 | 158,010 | 138,984 | |||||||||
Operating expenses | |||||||||||||
Sales and marketing | 29,723 | 26,433 | 58,285 | 51,549 | |||||||||
Research and development | 20,166 | 18,064 | 41,442 | 34,558 | |||||||||
General and administrative | 17,955 | 13,781 | 34,798 | 26,599 | |||||||||
Amortization | 524 | 418 | 1,012 | 1,005 | |||||||||
Total operating expenses | 68,368 | 58,696 | 135,537 | 113,711 | |||||||||
Income from operations | 14,461 | 15,996 | 22,473 | 25,273 | |||||||||
Interest income | 7 | 13 | 15 | 29 | |||||||||
Interest expense | (1,873 | ) | (1,328 | ) | (3,559 | ) | (2,787 | ) | |||||
Loss on sale of business | (1,976 | ) | — | (1,976 | ) | — | |||||||
Loss on debt extinguishment and termination of derivative instruments | — | — | — | (996 | ) | ||||||||
Other income (expense), net | 695 | 225 | 400 | (11 | ) | ||||||||
Income before provision for income taxes | 11,314 | 14,906 | 17,353 | 21,508 | |||||||||
Income tax provision | 4,272 | 5,626 | 6,026 | 8,414 | |||||||||
Net income | $ | 7,042 | $ | 9,280 | $ | 11,327 | $ | 13,094 | |||||
Earnings per share | |||||||||||||
Basic | $ | 0.15 | $ | 0.21 | $ | 0.25 | $ | 0.29 | |||||
Diluted | $ | 0.15 | $ | 0.20 | $ | 0.24 | $ | 0.29 | |||||
Common shares and equivalents outstanding | |||||||||||||
Basic weighted average shares | 45,579,345 | 45,155,955 | 45,554,645 | 45,141,878 | |||||||||
Diluted weighted average shares | 46,402,707 | 45,660,910 | 46,289,440 | 45,607,106 | |||||||||
Dividends per share | $ | 0.12 | $ | 0.12 | $ | 0.24 | $ | 0.24 | |||||
Other comprehensive (loss) income | |||||||||||||
Foreign currency translation adjustment | (196 | ) | (385 | ) | (522 | ) | 170 | ||||||
Unrealized gain (loss) on derivative instruments, net of tax | 97 | (394 | ) | (372 | ) | (82 | ) | ||||||
Total other comprehensive (loss) income | (99 | ) | (779 | ) | (894 | ) | 88 | ||||||
Comprehensive income | $ | 6,943 | $ | 8,501 | $ | 10,433 | $ | 13,182 | |||||
Blackbaud, Inc.
Consolidated statements of cash flows
(Unaudited)
Six months ended June 30, | ||||||
(in thousands) | 2015 | 2014 | ||||
Cash flows from operating activities | ||||||
Net income | $ | 11,327 | $ | 13,094 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||
Depreciation and amortization | 27,272 | 21,194 | ||||
Provision for doubtful accounts and sales returns | 2,934 | 2,966 | ||||
Stock-based compensation expense | 11,413 | 8,044 | ||||
Excess tax benefits from exercise and vesting of stock-based compensation | (954 | ) | (2,067 | ) | ||
Deferred taxes | (801 | ) | 1,757 | |||
Loss on sale of business | 1,976 | — | ||||
Impairment of capitalized software development costs | — | 770 | ||||
Loss on debt extinguishment and termination of derivative instruments | — | 996 | ||||
Amortization of deferred financing costs and discount | 420 | 343 | ||||
Other non-cash adjustments | 289 | 1,488 | ||||
Changes in operating assets and liabilities, net of acquisition of businesses: | ||||||
Accounts receivable | (13,355 | ) | (15,096 | ) | ||
Prepaid expenses and other assets | (2,102 | ) | 2,941 | |||
Trade accounts payable | 5,235 | (1,333 | ) | |||
Accrued expenses and other liabilities | (9,882 | ) | 4,419 | |||
Donor restricted cash | 78,718 | 62,609 | ||||
Donations payable | (78,718 | ) | (62,609 | ) | ||
Deferred revenue | 13,792 | 5,588 | ||||
Net cash provided by operating activities | 47,564 | 45,104 | ||||
Cash flows from investing activities | ||||||
Purchase of property and equipment | (7,014 | ) | (5,423 | ) | ||
Capitalized software development costs | (6,982 | ) | (3,831 | ) | ||
Purchase of net assets of acquired companies, net of cash acquired | — | (32,762 | ) | |||
Net cash used in sale of business | (521 | ) | — | |||
Net cash used in investing activities | (14,517 | ) | (42,016 | ) | ||
Cash flows from financing activities | ||||||
Proceeds from issuance of debt | 70,100 | 201,000 | ||||
Payments on debt | (93,388 | ) | (180,002 | ) | ||
Debt issuance costs | — | (2,484 | ) | |||
Proceeds from exercise of stock options | 18 | 107 | ||||
Excess tax benefits from from exercise and vesting of stock-based compensation | 954 | 2,067 | ||||
Dividend payments to stockholders | (11,255 | ) | (11,081 | ) | ||
Net cash (used in) provided by financing activities | (33,571 | ) | 9,607 | |||
Effect of exchange rate on cash and cash equivalents | (984 | ) | 263 | |||
Net (decrease) increase in cash and cash equivalents | (1,508 | ) | 12,958 | |||
Cash and cash equivalents, beginning of period | 14,735 | 11,889 | ||||
Cash and cash equivalents, end of period | $ | 13,227 | $ | 24,847 | ||
Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP financial measures
(Unaudited)
(in thousands, except per share amounts and percentages) | Three months ended June 30, | Six months ended June 30, | |||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
GAAP Revenue | $ | 156,259 | $ | 139,388 | $ | 303,252 | $ | 267,010 | |||||
Non-GAAP adjustments: | |||||||||||||
Add: Acquisition-related deferred revenue write-down | 2,484 | — | 6,006 | — | |||||||||
Non-GAAP revenue | $ | 158,743 | $ | 139,388 | $ | 309,258 | $ | 267,010 | |||||
GAAP gross profit | $ | 82,829 | $ | 74,692 | $ | 158,010 | $ | 138,984 | |||||
GAAP gross margin | 53.0 | % | 53.6 | % | 52.1 | % | 52.1 | % | |||||
Non-GAAP adjustments: | |||||||||||||
Add: Acquisition-related deferred revenue write-down | 2,484 | — | 6,006 | — | |||||||||
Add: Stock-based compensation expense | 1,049 | 953 | 1,950 | 1,829 | |||||||||
Add: Amortization of intangibles from business combinations | 7,567 | 5,330 | 15,206 | 10,767 | |||||||||
Add: Employee severance | 343 | — | 939 | — | |||||||||
Subtotal | 11,443 | 6,283 | 24,101 | 12,596 | |||||||||
Non-GAAP gross profit | $ | 94,272 | $ | 80,975 | $ | 182,111 | $ | 151,580 | |||||
Non-GAAP gross margin | 59.4 | % | 58.1 | % | 58.9 | % | 56.8 | % | |||||
GAAP income from operations | $ | 14,461 | $ | 15,996 | $ | 22,473 | $ | 25,273 | |||||
GAAP operating margin | 9.3 | % | 11.5 | % | 7.4 | % | 9.5 | % | |||||
Non-GAAP adjustments: | |||||||||||||
Add: Acquisition-related deferred revenue write-down | 2,484 | — | 6,006 | — | |||||||||
Add: Stock-based compensation expense | 6,311 | 4,330 | 11,413 | 8,044 | |||||||||
Add: Amortization of intangibles from business combinations | 8,091 | 5,748 | 16,218 | 11,772 | |||||||||
Add: Employee severance | 443 | — | 1,582 | — | |||||||||
Add: Impairment of capitalized software development costs | — | 770 | — | 770 | |||||||||
Add: Acquisition-related integration costs | 187 | 97 | 671 | 97 | |||||||||
Add: Acquisition-related expenses | 715 | 65 | 788 | 65 | |||||||||
Add: CEO transition costs | — | — | — | 870 | |||||||||
Subtotal | 18,231 | 11,010 | 36,678 | 21,618 | |||||||||
Non-GAAP income from operations | $ | 32,692 | $ | 27,006 | $ | 59,151 | $ | 46,891 | |||||
Non-GAAP operating margin | 20.6 | % | 19.4 | % | 19.1 | % | 17.6 | % | |||||
GAAP net income | $ | 7,042 | $ | 9,280 | $ | 11,327 | $ | 13,094 | |||||
Shares used in computing GAAP diluted earnings per share | 46,403 | 45,661 | 46,289 | 45,607 | |||||||||
GAAP diluted earnings per share | $ | 0.15 | $ | 0.20 | $ | 0.24 | $ | 0.29 | |||||
Non-GAAP adjustments: | |||||||||||||
Add: Total Non-GAAP adjustments affecting income from operations | 18,231 | 11,010 | 36,678 | 21,618 | |||||||||
Add: Loss on sale of business | 1,976 | — | 1,976 | — | |||||||||
Add: Loss on debt extinguishment and termination of derivative instruments | — | — | — | 996 | |||||||||
Less: Tax impact related to Non-GAAP adjustments | (8,019 | ) | (4,480 | ) | (15,816 | ) | (8,793 | ) | |||||
Non-GAAP net income | $ | 19,230 | $ | 15,810 | $ | 34,165 | $ | 26,915 | |||||
Shares used in computing Non-GAAP diluted earnings per share | 46,403 | 45,661 | 46,289 | 45,607 | |||||||||
Non-GAAP diluted earnings per share | $ | 0.41 | $ | 0.35 | $ | 0.74 | $ | 0.59 | |||||
Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP financial measures (continued)
(Unaudited)
(in thousands, except percentages) | Three months ended June 30, | Six months ended June 30, | |||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||
GAAP net income | $ | 7,042 | $ | 9,280 | $ | 11,327 | $ | 13,094 | |||||
Non-GAAP adjustments: | |||||||||||||
Add: Interest, net | 1,866 | 1,315 | 3,544 | 2,758 | |||||||||
Add: Income tax provision | 4,272 | 5,626 | 6,026 | 8,414 | |||||||||
Add: Depreciation | 4,517 | 4,345 | 9,293 | 8,648 | |||||||||
Add: Amortization of intangibles from business combinations | 8,091 | 5,748 | 16,218 | 11,772 | |||||||||
Add: Amortization of software development costs | 986 | 427 | 1,761 | 774 | |||||||||
Subtotal | 19,732 | 17,461 | 36,842 | 32,366 | |||||||||
EBITDA | $ | 26,774 | $ | 26,741 | $ | 48,169 | $ | 45,460 | |||||
EBITDA Margin | 16.9 | % | 19.2 | % | 15.6 | % | 17.0 | % | |||||
Non-GAAP adjustments: | |||||||||||||
Add: Other (income) expense, net | (695 | ) | (225 | ) | (400 | ) | 11 | ||||||
Add: Loss on sale of business | 1,976 | — | 1,976 | — | |||||||||
Add: Loss on debt extinguishment and termination of derivative instruments | — | — | — | 996 | |||||||||
Add: Acquisition-related deferred revenue write-down | 2,484 | — | 6,006 | — | |||||||||
Add: Stock-based compensation expense | 6,311 | 4,330 | 11,413 | 8,044 | |||||||||
Add: Employee severance | 443 | — | 1,582 | — | |||||||||
Add: Impairment of capitalized software development costs | — | 770 | — | 770 | |||||||||
Add: Acquisition-related integration costs | 187 | 97 | 671 | 97 | |||||||||
Add: Acquisition-related expenses | 715 | 65 | 788 | 65 | |||||||||
Add: CEO transition costs | — | — | — | 870 | |||||||||
Subtotal | 11,421 | 5,037 | 22,036 | 10,853 | |||||||||
Adjusted EBITDA | $ | 38,195 | $ | 31,778 | $ | 70,205 | $ | 56,313 | |||||
Adjusted EBITDA Margin | 24.1 | % | 22.8 | % | 22.7 | % | 21.1 | % | |||||
Detail of certain Non-GAAP adjustments: | |||||||||||||
Stock-based compensation expense: | |||||||||||||
Included in cost of revenue: | |||||||||||||
Cost of subscriptions | $ | 325 | $ | 175 | $ | 468 | $ | 364 | |||||
Cost of maintenance | 85 | 196 | 246 | 341 | |||||||||
Cost of services | 639 | 582 | 1,236 | 1,124 | |||||||||
Total included in cost of revenue | 1,049 | 953 | 1,950 | 1,829 | |||||||||
Included in operating expenses: | |||||||||||||
Sales and marketing | 804 | 588 | 1,506 | 1,059 | |||||||||
Research and development | 1,186 | 762 | 2,164 | 1,424 | |||||||||
General and administrative | 3,272 | 2,027 | 5,793 | 3,732 | |||||||||
Total included in operating expenses | 5,262 | 3,377 | 9,463 | 6,215 | |||||||||
Total stock-based compensation expense | $ | 6,311 | $ | 4,330 | $ | 11,413 | $ | 8,044 | |||||
Amortization of intangibles from business combinations: | |||||||||||||
Included in cost of revenue: | |||||||||||||
Cost of subscriptions | $ | 5,767 | $ | 4,434 | $ | 11,539 | $ | 8,994 | |||||
Cost of maintenance | 1,006 | 115 | 2,159 | 230 | |||||||||
Cost of services | 702 | 676 | 1,309 | 1,332 | |||||||||
Cost of license fees and other | 92 | 105 | 199 | 211 | |||||||||
Total included in cost of revenue | 7,567 | 5,330 | 15,206 | 10,767 | |||||||||
Included in operating expenses | 524 | 418 | 1,012 | 1,005 | |||||||||
Total amortization of intangibles from business combinations | $ | 8,091 | $ | 5,748 | $ | 16,218 | $ | 11,772 | |||||