Press Releases

Unedited news and product information from vendors.

Blackboard Inc. Reports First Quarter Revenue of $101.1 Million
May 05, 2010 (04:05 PM EDT)


- Blackboard Raises Earnings and Revenue Guidance for Full Year 2010 -

WASHINGTON, May 5 /PRNewswire-FirstCall/ -- Blackboard Inc. (Nasdaq: BBBB) today announced financial results for the first quarter ended March 31, 2010 and updated guidance for the second quarter and the full year of 2010.  

Total revenue for the quarter ended March 31, 2010 was $101.1 million, an increase of 17 percent over the first quarter of 2009. Product revenues for the quarter were $93.7 million, an increase of 17 percent over the first quarter of 2009, while professional services revenues for the quarter were $7.3 million, an increase of 16 percent over the first quarter of 2009.    

GAAP net income was $5.0 million, resulting in net income per basic and diluted share of $0.15 per share for the first quarter of 2010 compared to a net loss of $37,000 or a net loss per basic and diluted share of ($0.00) per share for the first quarter of 2009. Non-GAAP adjusted net income for the first 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 $14.4 million, resulting in non-GAAP adjusted net income per diluted share of $0.42 compared to non-GAAP adjusted net income of $8.6 million or $0.27 per diluted share for the first quarter of 2009.

"I am pleased with our strong financial results in the first quarter.  We experienced solid revenue growth, with particularly good performance in our U.S. higher education business," said Michael Chasen, chief executive officer and president of Blackboard. "We have strengthened our offerings with the introduction of Blackboard Learn Release 9.1 as well as mobile solutions like Blackboard Mobile Central and Blackboard Mobile Learn. We are well positioned to capture the expanding opportunity in global education."

Highlights from the First Quarter of 2010

  • Blackboard's new and expanding client relationships in the quarter included:
    • U.S. Higher Education Market: Arizona State University, Gonzaga University, Lindenwood University, Loyola Marymount University, Mountain View College, Oakland Community College, Rutgers University, Ryerson University, Texas A&M University, University of AlabamaBirmingham, University of Wisconsin System Administration and others.
    • International Markets: Charles Darwin University, Colegio de Posgraduados (COLPOS), Corporativa Colombia, Giordano Bruno, King Saud University, MondoBIOTECH AG, Northern Grid for Learning, St. Hilda's College, The European Commission, University of Amsterdam and others.
    • K-12 Market: Brunswick School (CT), ESSDACK (KS), Gilbert Christian Schools (AZ), Montgomery County Public Schools (MD), Passaic County Vocational Technical High School (NJ), Public Schools of Robeson County (NC), Shawano School District (WI), Thomasville County Schools (OH), Weld County School District (CO) and others.
  • Blackboard completed its acquisition of privately-held Saf-T-Net, Inc., provider of AlertNow, a leading messaging and mass notification solution. The acquisition was completed March 19, 2010 for $34.9 million in net cash, including transaction costs.
  • Blackboard announced plans for Blackboard Mobile Learn™, an application that will bring two-way teaching and learning to mobile devices, creating an interactive mobile learning experience for students and teachers on the go.
  • Blackboard announced a partnership with Sprint Corporation to offer Blackboard Mobile Learn™ to users of Sprint devices at no additional cost to institutions.
  • Blackboard announced the launch of Blackboard Pay™, an open-loop prepaid card program that lets educational institutions simplify the disbursement of financial aid credit balances -- as well as student payroll -- while cutting costs for institutions and lowering student fees.

Outlook for the Second Quarter and Full Year of 2010

Second Quarter of 2010:

  • Revenue of $104.2 million to $108.2 million;
  • Stock-based compensation expense of approximately $5.0 million;
  • Amortization of acquired intangibles of approximately $8.8 million;
  • GAAP net income of $2.6 million to $4.9 million,
  • GAAP net income per diluted share of $0.07 to $0.14, which is based on an estimated 35.1 million diluted shares and an estimated effective tax rate of approximately 33.0 percent;
  • Non-GAAP adjusted net income of $11.9 to $14.3 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 $0.34 to $0.41 based on an estimated 35.1 million diluted shares and an estimated effective tax rate of approximately 38.0 percent.

Full Year 2010:

  • Revenue of $433.4 to $445.4 million;
  • Amortization of acquired intangibles of approximately $34.5 million;
  • Stock-based compensation expense of approximately $20.7 million;
  • GAAP net income of $22.7 to $29.7 million,
  • GAAP net income per diluted share of $0.64 to $0.84, which is based on an estimated 35.2 million diluted shares and an estimated effective tax rate of approximately 33.0 percent;
  • Non-GAAP adjusted net income of $59.8 to $66.8 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 $1.70 to $1.90  based on an estimated 35.2 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 $80.0 to $90.0 million.

Beginning in the first quarter of 2010, Blackboard will be reporting its revenue in the following two categories: recurring revenue and non-recurring revenue.  These new categories replace recurring ratable revenue, non-recurring ratable revenue and other revenue which the Company had previously provided.  Blackboard is combining non-recurring-ratable revenues and other revenues in the new non-recurring revenue category. For the purpose of future comparisons, Blackboard is providing recurring revenue and non-recurring revenue for 2009 below:



Three Months Ended March 31, 2009


Three Months Ended June 30, 2009



Product
Revenue

Professional
Services
Revenue

Total


Product
Revenue

Professional
Services
Revenue

Total



(unaudited and denoted in thousands)

Recurring revenue


$     70.4

$               1.2

$  71.6


$     73.6

$               1.2

$  74.8

Non-recurring revenue


9.7

5.1

14.8


9.8

7.5

17.3

    Total revenue


$     80.1

$               6.3

$  86.4


$     83.4

$               8.7

$  92.1





Three Months Ended September 30, 2009


Three Months Ended December 31, 2009



Product
Revenue

Professional
Services
Revenue

Total


Product
Revenue

Professional
Services
Revenue

Total



(unaudited and denoted in thousands)

Recurring revenue


$     77.6

$               1.6

$  79.2


$     79.8

$               1.7

$  81.5

Non-recurring revenue


10.3

8.9

19.2


10.9

7.7

18.6

    Total revenue


$     87.9

$             10.5

$  98.4


$     90.7

$               9.4

$100.1





Year Ended December 31, 2009



Product
Revenue

Professional
Services
Revenue

Total



(unaudited and denoted in thousands)

Recurring revenue


$   301.4

$               5.7

$307.1

Non-recurring revenue


40.7

29.2

69.9

    Total revenue


$   342.1

$             34.9

$377.0



Conference Call

Blackboard will broadcast its first 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 Company's Web site at http://investor.blackboard.com. Please access the Web site at least 15 minutes prior to the start of the call to register, download and install any necessary software.

A replay of the call will be available via telephone from approximately 7:30 p.m. Eastern (4:30 p.m. Pacific) on May 5, 2010 until 11:30 p.m. Eastern (8:30 p.m. Pacific) on May 12, 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 62015517.

BLACKBOARD INC.


UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS


(in thousands, except share and per share amounts)








Three Months Ended



March 31



2009


2010

Revenues:





Product

$     80,126


$     93,730


Professional services

6,322


7,336

Total revenues

86,448


101,066

Operating expenses:





Cost of product revenues, excludes $3,638 and $2,508 for the three months ended March 31, 2008 and 2009, respectively, in amortization of acquired technology included in amortization of intangibles resulting from acquisitions shown below (1)

21,444


24,534


Cost of professional services revenues (1)

4,767


4,479


Research and development (1)

10,827


12,205


Sales and marketing (1)

23,941


25,315


General and administrative (1)

13,602


14,705


Amortization of intangibles resulting from acquisitions

8,585


8,978

Total operating expenses

83,166


90,216

Income from operations

3,282


10,850

Other (expense) income:





Interest expense

(2,891)


(2,888)


Interest income

107


21


Other expense

(558)


(527)

Loss (income) before benefit (provision) for income taxes

(60)


7,456

Benefit (provision) for income taxes

23


(2,420)

Net (loss) income

$           (37)


$       5,036

Net (loss) income per common share:





Basic

$        (0.00)


$         0.15


Diluted

$        (0.00)


$         0.15

Weighted average number of common shares:





Basic

31,503,578


33,432,192


Diluted

31,503,578


34,397,711






(1) Includes the following amounts related to stock-based compensation:





Cost of product revenues

$          270


$          337


Cost of professional services revenues

90


148


Research and development

227


268


Sales and marketing

1,582


1,868


General and administrative

1,818


2,335






Reconciliation of GAAP Net (loss) income before benefit (provision) for income taxes to Non-GAAP adjusted net income (2):









GAAP Net loss before benefit for income taxes

$           (60)


$       7,456

Add: Amortization of intangibles resulting from acquisitions

8,585


8,978

Add: Stock-based compensation

3,987


4,956

Add: Non-cash interest expense

1,555


1,528

Adjusted provision for income taxes (3)

(5,462)


(8,527)

Non-GAAP adjusted net income

$       8,605


$     14,391

Non-GAAP adjusted net income per common share - diluted

$         0.27


$         0.42

Weighted average number of diluted common shares

32,019,009


34,397,711






(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.  

(3) Adjusted provision for income taxes is applied at an effective rate of approximately 38.8% and 37.2% for the three months ended March 31, 2009 and 2010, respectively.



BLACKBOARD INC.


UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS













December 31,


March 31,




2009


2010




(in thousands,




except per share amounts)

ASSETS

Current assets:





Cash and cash equivalents

$        167,353


$  146,276


Accounts receivable, net

69,098


51,394


Inventories

1,557


378


Prepaid expenses and other current assets

14,803


14,477


Deferred tax asset, current portion

2,692


-


Deferred cost of revenues

7,664


6,553



Total current assets

263,167


219,078







Deferred tax asset, noncurrent portion

18,188


18,800

Investment in common stock warrant

3,124


3,124

Restricted cash

3,923


3,896

Property and equipment, net

34,483


33,044

Other assets

1,453


1,180

Goodwill and intangible assets, net

400,596


433,583

Total assets

$        724,934


$  712,705







LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:





Accounts payable

$            2,360


$      2,192


Accrued expenses

28,264


21,999


Deferred rent, current portion

1,021


475


Deferred tax liability, current portion

-


478


Deferred revenues, current portion

186,702


151,347



Total current liabilities

218,347


176,491







Notes payable, net of debt discount

156,177


157,706

Deferred rent, noncurrent portion

11,507


11,879

Deferred tax liability, noncurrent portion

1,474


1,694

Deferred revenues, noncurrent portion

5,957


5,269

Stockholders' equity:





Common stock, $0.01 par value

331


340


Additional paid-in capital

406,751


429,900


Accumulated deficit

(75,610)


(70,574)

Total stockholders' equity

331,472


359,666

Total liabilities and stockholders' equity

$        724,934


$  712,705





















BLACKBOARD INC.


UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS










Three Months Ended




March 31




2009


2010




(in thousands)

Cash flows from operating activities




Net (loss) income

$        (37)


$    5,036

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:





Deferred income tax benefit

(1,856)


(398)


Excess tax benefits from stock-based compensation

(182)


(2,800)


Amortization of debt discount

1,555


1,528


Depreciation and amortization

4,719


4,629


Amortization of intangibles resulting from acquisitions

8,585


8,978


Change in allowance for doubtful accounts

289


(316)


Stock-based compensation

3,987


4,956


Changes in operating assets and liabilities:






Accounts receivable

35,786


18,488



Inventories

(178)


1,178



Prepaid expenses and other current assets

(3,858)


629



Deferred cost of revenues

1,344


1,112



Accounts payable

73


(1,628)



Accrued expenses

(6,914)


(3,571)



Deferred rent

658


(173)



Deferred revenues

(39,585)


(38,877)

Net cash provided by (used in) operating activities

4,386


(1,229)







Cash flows from investing activities





Purchases of property and equipment

(5,287)


(3,165)


Payments for patent enforcement costs

(41)


-


Purchase of available-for-sale investments

(6,586)


-


Acquisitions, net of cash acquired

-


(34,912)

Net cash used in investing activities

(11,914)


(38,077)







Cash flows from financing activities





Release of letter of credit

80


27


Excess tax benefits from stock-based compensation

182


2,800


Proceeds from exercise of stock options

1,684


15,402

Net cash provided by financing activities

1,946


18,229

Net decrease in cash and cash equivalents

(5,582)


(21,077)

Cash and cash equivalents at beginning of year

141,746


167,353

Cash and cash equivalents at end of year

$136,164


$146,276



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-K filed on February 17, 2010 with the SEC. In addition, the forward-looking statements included in this press release represent the Company's views as of May 5, 2010. 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 May 5, 2010.

Use of Non-GAAP Financial Measures

This release includes information about the Company's 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 of acquisition-related intangible assets, stock-based compensation, and non-cash interest expense, all net of taxes, 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 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 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 in 2010 that are determined on a basis that excludes amortization of acquired intangibles, stock-based compensation expense and non-cash interest expense, all net of taxes.

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 Company's Form 10-K dated February 17, 2010, as well as other filings with the Securities and Exchange Commission when assessing the Company's financial condition and results of operations.

SOURCE Blackboard Inc.