WASHINGTON, Feb. 3, 2011 /PRNewswire/ -- Blackboard Inc.
(Nasdaq: BBBB) today announced financial results for the fourth
quarter and year ended December 31,
2010 and updated guidance for the first quarter and full
year 2011.
"We had a great fourth quarter which capped a very good year for
Blackboard," said Michael Chasen,
chief executive officer and president of Blackboard. "During 2010,
we made a number of strategic investments, further expanding our
products and services, in order to offer our customers a more
comprehensive integrated suite of technology that provides an
improved educational experience in a more cost effective way.
We see momentum accelerating for a number of key industry
trends which we are well positioned to capitalize on for 2011 and
beyond including access to solutions through mobile devices and the
adoption of cloud-based architectures."
Blackboard's fourth quarter revenue was $117.7 million, an increase of 18 percent over
the same period in 2009. Product revenue in the fourth
quarter was $109.1 million, an
increase of 20 percent over the $90.8
million of product revenue in the fourth quarter of last
year. Professional services revenue for the fourth quarter
was $8.6 million, which represents a
decrease of 7 percent over the same period in 2009.
GAAP net income was $1.5 million
for the fourth quarter of 2010 compared to GAAP net income of
$7.7 million in the same period last
year. GAAP net income per diluted share was $0.04 compared to GAAP net income per diluted
share of $0.23 in the same period
last year. Non-GAAP adjusted net income for the fourth quarter of
2010, which excludes the amortization of acquisition-related
intangible assets, stock-based compensation expense, and non-cash
interest expense, all net of taxes, was $11.8 million, resulting in non-GAAP adjusted net
income per diluted share of $0.34
compared to non-GAAP adjusted net income of $16.7 million and non-GAAP adjusted net income
per diluted share of $0.49 for the
fourth quarter of 2009.
Total revenue for the year ended December
31, 2010 was $447.3 million,
an increase of 19 percent over the prior year. GAAP net income was
$16.6 million for the year ended
December 31, 2010 compared to GAAP
net income of $7.9 million in the
same period last year. For the year ended December 31, 2010, GAAP net income per diluted
share was $0.48 compared to GAAP net
income per diluted share of $0.24 for
2009. Non-GAAP adjusted net income for the full year 2010 was
$55.8 million, resulting in non-GAAP
adjusted net income per diluted share of $1.60 compared to non-GAAP adjusted net income of
$47.0 million and non-GAAP adjusted
net income per diluted share of $1.42
in 2009.
Additional Financial Highlights from the Fourth Quarter and
Full Year 2010
- Free cash flow (cash flow from operations less purchases of
property and equipment) was $41.9
million for the fourth quarter of 2010 and $90.0 million for the full year 2010.
- Cash and cash equivalents were $70.3
million as of December 31,
2010.
- Total deferred revenues increased 13 percent year-over-year to
$218.0 million as of December 31, 2010.
"2010 was a strong year for Blackboard. We delivered
consistent revenue and earnings performance and significant free
cash flow," said John Kinzer, chief
financial officer of Blackboard. "In 2011 and beyond, we are well
positioned to drive top line growth while continuing our focus on
expanding profitability."
Highlights from the Fourth Quarter of 2010
- Blackboard's new and expanding client relationships in the
quarter included:
- U.S. Higher Education: Cleveland
State University, East Carolina
University, Eastern Michigan
University, Georgetown
University, Holy Family University, Jacksonville State University, Lone Star Community
College, Northern Essex Community
College, Pasadena Community College, Riverside Community College, Sam Houston State University, Southwest Mississippi
State, Tallahassee Community College,
University of Central Arkansas and
others.
- International: Curtin
University, Hogeschool voor de Kunsten, Instituto
Profesional DUOC, Kazan Automotive University, King Saud University
for Health and Sciences, Liverpool
University, Malardalen University, Salford University,
Technical and Vocational Training Center in Saudi Arabia, Universidad Camilo Jose Cela,
University of Information, Technology and Management, University of
Western Sydney, Woosong University
and others.
- K-12: Albuquerque Public Schools (NM), Ascension Parish
Public Schools (LA), Briarcliff Manor Union Free School District
(NY), Clark County School District
(NV), El Monte UHSD (CA), Florida Virtual School, Half Hollow
School District (NY), Maize Unified School District 266 (KS),
Pulaski County Special School District (AR), Stafford County Public
Schools (VA) and others.
- Professional Education (ProEd): Capella University, Herzing University, Laureate
Education, National Strength and Conditioning Association,
Defense Language Institute,
Salem International University,
Schiller International University,
Strayer University, Ultimate Medical Academy , Walden University and others.
- Blackboard's enterprise licenses totaled 12,458.
- Blackboard ended 2010 with 9,350 total clients.
- Blackboard's annual renewal rate was approximately 91 percent
during 2010.
- Blackboard announced more than 1,200 clients are now on
Blackboard's next generation online teaching and learning platform,
Blackboard Learn™ Release 9.1.
- Blackboard announced support for the Common Core State
Standards, which are now directly accessible for the K-12 community
within the Blackboard Learn, Release 9.1 and ANGEL Edition
platforms. The integration makes it easy for teachers and
administrators to search the standards database from within the
course environment to ensure that courses and content are aligned
to the new standards.
Outlook for the First Quarter and Full Year of 2011
The following guidance is inclusive of the Presidium Inc.
acquisition previously announced on January
12, 2011.
First Quarter of 2011:
- GAAP revenue of approximately $115.4
million;
- GAAP net loss of approximately ($5.7)
million;
- GAAP net loss per diluted share of approximately ($0.16) based on an estimated 35.9 million
diluted shares and an estimated GAAP effective tax rate of
approximately 30.0 percent;
- Non-GAAP revenue of approximately $121.0
million;
- Non-GAAP net income of approximately $9.7 million; and
- Non-GAAP net income per diluted share of approximately
$0.27 based on an estimated 35.9
million diluted shares and an estimated non-GAAP effective tax rate
of approximately 40.0 percent.
Full Year 2011:
- GAAP revenue of approximately $528.2
million;
- GAAP net income of approximately $21.5
million;
- GAAP net income per diluted share of approximately $0.59 based on an estimated 36.2 million diluted
shares and an estimated GAAP effective tax rate of approximately
30.0 percent;
- Non-GAAP revenue of approximately $540.0
million;
- Non-GAAP net income of approximately $65.8 million;
- Non-GAAP net income per diluted share of approximately
$1.82 based on an estimated 36.2
million diluted shares and an estimated non-GAAP effective tax rate
of approximately 37.0 percent; and
- Free cash flow (cash flow from operations less purchases of
property and equipment) of approximately $90.0 to $100.0 million.
Blackboard Conference Call
Information:
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Domestic:
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+1 (866) 700-7441
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International:
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+1 (617) 213-8839
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Confirmation Code:
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89447738
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Blackboard will also broadcast its conference call live over the
Internet beginning at 4:30 p.m. on
February 3, 2011, and interested
parties can access the webcast through the Investor Relations
section of the Company's Web site at
http://investor.blackboard.com.
A replay of the call will be available via telephone from
approximately 7:00 p.m. Eastern
(4:00 p.m. Pacific) on February 3, 2011 until
11:00 p.m. Eastern (8:00 p.m. Pacific) on
February 10, 2011. 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 96236089.
BLACKBOARD
INC.
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UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
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(in
thousands, except share and per share amounts)
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|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
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Year
Ended
|
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December
31
|
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December
31
|
|
December
31
|
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December
31
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|
2009
|
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2010
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2009
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2010
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Revenues:
|
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Product
|
$
90,775
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$
109,130
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$
342,144
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$
412,641
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Professional services
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9,259
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8,572
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34,856
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34,677
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Total revenues
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100,034
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117,702
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|
377,000
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447,318
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Operating expenses:
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Cost of product revenues,
excludes $2,497 and $2,489 for the three months ended December 31,
2009 and 2010, respectively, and $10,649 and $10,161 for the year
ended December 31, 2009 and 2010, respectively, in amortization of
acquired technology included in amortization of intangibles
resulting from acquisitions shown below (1)
|
23,913
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29,737
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|
90,968
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|
110,105
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Cost of professional services
revenues (1)
|
5,005
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|
6,863
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20,024
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|
22,717
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Research and development
(1)
|
12,119
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|
15,676
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|
45,967
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|
55,009
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|
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Sales and marketing
(1)
|
24,742
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|
35,382
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|
98,751
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|
121,190
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General and administrative
(1)
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13,911
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16,329
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56,387
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65,962
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Patent-related impairment and
other costs
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-
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-
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10,984
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-
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Amortization of intangibles
resulting from acquisitions
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9,266
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10,306
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34,994
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38,320
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Total operating
expenses
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88,956
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114,293
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358,075
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413,303
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Income from
operations
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11,078
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3,409
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|
18,925
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34,015
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Other expense, net:
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Interest expense
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(3,122)
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(3,228)
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(11,999)
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(12,206)
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Interest income
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28
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|
21
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|
230
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|
126
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Other income (expense),
net
|
350
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|
1,897
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|
1,453
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|
1,352
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Income before provision for
income taxes
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8,334
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|
2,099
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|
8,609
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|
23,287
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Provision for income
taxes
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(620)
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(584)
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(697)
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(6,643)
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Net income
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$
7,714
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$
1,515
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|
$
7,912
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$
16,644
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Net income per common
share:
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Basic
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$
0.24
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$
0.04
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$
0.25
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$
0.49
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Diluted
|
$
0.23
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$
0.04
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$
0.24
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$
0.48
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Weighted average number of
common shares:
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Basic
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32,707,631
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34,508,139
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32,065,700
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34,082,992
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Diluted
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33,704,096
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35,204,511
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33,100,858
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34,848,896
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(1) Includes the following
amounts related to stock-based compensation:
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Cost of product
revenues
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$
302
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|
$
288
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$
1,225
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|
1,205
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Cost of professional services
revenues
|
127
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|
186
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|
524
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|
662
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Research and
development
|
250
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|
278
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|
1,018
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|
1,177
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|
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Sales and marketing
|
1,476
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2,219
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6,101
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8,067
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General and
administrative
|
1,823
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2,078
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7,091
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8,870
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|
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Reconciliation of GAAP net
income before provision for income taxes to non-GAAP adjusted net
income (2):
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GAAP Net income before provision
for income taxes
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$
8,334
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$
2,099
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$
8,609
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$
23,287
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Add: Non-cash patent related
impairment
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-
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-
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7,447
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-
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Add: Amortization of intangibles
resulting from acquisitions
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9,266
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10,306
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34,994
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38,320
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Add: Stock-based
compensation
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3,978
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5,049
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15,959
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19,981
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Add: Non-cash interest
expense
|
1,565
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1,695
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6,254
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6,406
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Adjusted provision for income
taxes (3)
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(6,470)
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(7,319)
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(26,235)
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(32,202)
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Non-GAAP adjusted net
income
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$
16,673
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$
11,830
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$
47,028
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$
55,792
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Non-GAAP adjusted net income per
common share - diluted
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$
0.49
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$
0.34
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$
1.42
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$
1.60
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Weighted average number of
diluted common shares
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33,704,096
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35,204,511
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33,100,858
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34,848,896
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(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 Company’s 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.
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(3) Adjusted provision for
income taxes is applied at an effective rate of approximately 28.0%
and 38.2% for the three months ended December 31, 2009 and 2010,
respectively, and approximately 35.8% and 36.6% for the years ended
December 31, 2009 and 2010, respectively.
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BLACKBOARD
INC.
|
|
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UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
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(in
thousands, except per share amounts)
|
|
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|
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|
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December
31,
|
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December
31,
|
|
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|
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2009
|
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2010
|
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ASSETS
|
|
Current assets:
|
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Cash and cash
equivalents
|
$
167,353
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$
70,314
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Accounts receivable,
net
|
69,098
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|
90,199
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Inventories
|
1,557
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128
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Prepaid expenses and other
current assets
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15,232
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|
16,833
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Deferred tax asset, current
portion
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2,692
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|
5,683
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Deferred cost of
revenues
|
7,664
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|
3,256
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|
|
|
Total current assets
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263,596
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|
186,413
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Deferred tax asset, noncurrent
portion
|
18,188
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|
14,148
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|
Investment in common stock
warrant
|
3,124
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|
-
|
|
Restricted cash
|
3,923
|
|
5,741
|
|
Property and equipment,
net
|
34,483
|
|
43,002
|
|
Other assets
|
1,453
|
|
1,582
|
|
Goodwill
|
328,858
|
|
479,693
|
|
Intangible assets,
net
|
71,309
|
|
116,649
|
|
Total assets
|
$
724,934
|
|
$
847,228
|
|
|
|
|
|
|
|
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LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
$
2,360
|
|
$
1,818
|
|
|
Accrued expenses
|
28,264
|
|
41,018
|
|
|
Deferred rent, current
portion
|
1,021
|
|
450
|
|
|
Deferred revenues, current
portion
|
186,702
|
|
211,752
|
|
|
Convertible senior notes, net of
debt discount
|
-
|
|
162,326
|
|
|
|
Total current
liabilities
|
218,347
|
|
417,364
|
|
|
|
|
|
|
|
|
Convertible senior notes, net of
debt discount
|
156,177
|
|
-
|
|
Deferred rent, noncurrent
portion
|
11,507
|
|
11,978
|
|
Deferred tax liability,
noncurrent portion
|
1,474
|
|
3,580
|
|
Deferred revenues, noncurrent
portion
|
5,957
|
|
6,223
|
|
Stockholders' equity:
|
|
|
|
|
|
Common stock, $0.01 par
value
|
331
|
|
345
|
|
|
Additional paid-in
capital
|
406,751
|
|
465,910
|
|
|
Accumulated other comprehensive
income, net
|
-
|
|
794
|
|
|
Accumulated deficit
|
(75,610)
|
|
(58,966)
|
|
Total stockholders'
equity
|
331,472
|
|
408,083
|
|
Total liabilities and
stockholders' equity
|
$
724,934
|
|
$
847,228
|
|
|
|
|
|
|
|
BLACKBOARD
INC.
|
|
|
|
|
|
|
|
|
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
|
|
|
December
31
|
|
|
|
|
2009
|
|
2010
|
|
|
|
|
(in
thousands)
|
|
Cash flows from operating
activities
|
|
|
|
|
Net income
|
$ 7,912
|
|
$ 16,644
|
|
Adjustments to reconcile net
income to net cash provided by operating activities:
|
|
|
Deferred income tax
benefit
|
(5,889)
|
|
(1,408)
|
|
|
Excess tax benefits from
stock-based compensation
|
(3,729)
|
|
(3,116)
|
|
|
Amortization of debt
discount
|
6,254
|
|
6,406
|
|
|
Depreciation and
amortization
|
18,887
|
|
20,050
|
|
|
Amortization of intangibles
resulting from acquisitions
|
34,994
|
|
38,320
|
|
|
Patent related impairment
charge
|
7,447
|
|
-
|
|
|
Change in allowance for doubtful
accounts
|
258
|
|
(190)
|
|
|
Stock-based
compensation
|
15,959
|
|
19,981
|
|
|
Gain on investment in common
stock warrant
|
(1,134)
|
|
(1,488)
|
|
|
Changes in operating assets and
liabilities:
|
|
|
|
|
|
|
Accounts receivable
|
13,371
|
|
(7,325)
|
|
|
|
Inventories
|
226
|
|
1,429
|
|
|
|
Prepaid expenses and other
current assets
|
(6,404)
|
|
1,753
|
|
|
|
Deferred cost of
revenues
|
(538)
|
|
4,409
|
|
|
|
Accounts payable
|
(277)
|
|
(3,580)
|
|
|
|
Accrued expenses
|
4,127
|
|
6,722
|
|
|
|
Deferred rent
|
1,224
|
|
(100)
|
|
|
|
Deferred revenues
|
17,163
|
|
13,085
|
|
Net cash provided by operating
activities
|
109,851
|
|
111,592
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities
|
|
|
|
|
|
Purchases of property and
equipment
|
(18,946)
|
|
(21,557)
|
|
|
Payments for patent enforcement
costs
|
(414)
|
|
-
|
|
|
Purchase of available-for-sale
investments
|
(6,586)
|
|
-
|
|
|
Redemptions of
available-for-sale investments
|
6,586
|
|
-
|
|
|
Acquisitions, net of cash
acquired
|
(93,434)
|
|
(220,584)
|
|
Net cash used in investing
activities
|
(112,794)
|
|
(242,141)
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities
|
|
|
|
|
|
Payments on letters of
credit
|
(3,474)
|
|
(1,244)
|
|
|
Release of letters of
credit
|
3,800
|
|
180
|
|
|
Payment for debt issuance
costs
|
-
|
|
(1,727)
|
|
|
Excess tax benefits from
stock-based compensation
|
3,729
|
|
3,116
|
|
|
Proceeds from exercise of stock
options
|
24,495
|
|
33,185
|
|
Net cash provided by financing
activities
|
28,550
|
|
33,510
|
|
Net increase (decrease) in cash
and cash equivalents
|
25,607
|
|
(97,039)
|
|
Cash and cash equivalents at
beginning of period
|
141,746
|
|
167,353
|
|
Cash and cash equivalents at end
of period
|
$167,353
|
|
$
70,314
|
|
|
|
|
|
|
|
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.
Blackboard's 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.
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. 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 November 5, 2010 with the SEC. In
addition, the forward-looking statements included in this press
release represent the Company's views as of February 3, 2011. The Company anticipates that
subsequent events and developments will cause the Company's 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 Company's views as of any date subsequent to
February 3, 2011.
Use of Non-GAAP Financial Measures
This release includes information about the Company's non-GAAP
revenue, non-GAAP net income, non-GAAP net income per diluted
share, and free cash flow, which are non-GAAP financial measures.
Management believes that these measures provide additional useful
information to investors regarding the Company's ongoing financial
condition and results of operations and aspects of current
operating performance that can be effectively managed. Because the
Company has historically reported 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 Company's historic operating trends by providing an
additional basis for comparisons to prior periods. In addition, the
Company's internal reporting, including information provided to the
Company's 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 reflects non-GAAP
measures and other items as determined by the Board of
Directors.
In 2010, the Company's non-GAAP net income and non-GAAP net
income per diluted share exclude the amortization or impairment of
intangible assets, stock-based compensation expense and non-cash
interest expense, all net of taxes. Beginning in 2011, the
Company's non-GAAP financial measures will also exclude certain
impacts of acquisitions. Specifically, the Company's non-GAAP
revenue, non-GAAP net income and non-GAAP net income per diluted
share measures will include deferred revenue of entities we have
acquired that would have been recognized but for GAAP's purchase
accounting treatment requiring the elimination of this deferred
revenue upon acquisition. While we cannot be certain that customers
will renew the contracts that generated the deferred revenue, the
Company has historically experienced high renewal rates and we
believe GAAP results, which eliminate the recognition of these
deferred revenues, alone do not fully capture all of the Company's
economic activities. Further, the Company's non-GAAP net income and
non-GAAP net income per diluted share measure will include the
deferred revenue adjustment and exclude certain transition,
integration and transaction-related expense items resulting from
acquisitions and non-cash translation gains or losses, all net of
taxes. The Company does not consider these adjustments to be
related to the organic continuing operations of the acquired
businesses and they are generally not relevant to assessing or
estimating the long-term performance of the acquired assets.
Although acquisition-related revenue and expenses are generally
non-recurring with respect to past acquisitions, the Company
generally will incur these adjustments in connection with any
future acquisitions; however, the size, complexity and/or volume of
past acquisitions, which often drives the magnitude of
acquisition-related costs, may not be indicative of the size,
complexity and/or volume of future acquisitions. Because the
Company considers these revenue and expense adjustments, to a great
extent, to be unpredictable and dependent on a significant number
of factors that are outside of the control of the Company, the
non-GAAP measures that exclude these adjustments allow management
to better evaluate the Company's ability to utilize its existing
assets and estimate the long-term value that acquired assets will
generate for the Company. For the same reasons, the non-GAAP
measures will be useful to investors because they will allow for
more complete comparisons of forward-looking guidance to the
financial results of historical operations and the financial
results of peer companies.
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 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
Company's Form 10-Q dated November 5,
2010, as well as other filings with the Securities and
Exchange Commission when assessing the Company's financial
condition and results of operations. A reconciliation of GAAP to
non-GAAP revenue, non-GAAP net income, non-GAAP net income per
diluted share and non-GAAP free cash flow is available on our
website at http://investor.blackboard.com.
SOURCE Blackboard Inc.