Blackboard Inc. Reports First Quarter 2007 Results
- First Quarter Revenue Increases 47 Percent to $55.3 Million -
- Company Raises Financial Guidance for 2007 -
WASHINGTON, May 2 /PRNewswire-FirstCall/ -- Blackboard Inc. (Nasdaq: BBBB)
today announced financial results for the first quarter ended March 31, 2007
and updated guidance for the second quarter and the full year of 2007.
Total revenue for the quarter ended March 31, 2007 was $55.3 million, an
increase of 47 percent over the first quarter of 2006. Product revenues for
the quarter were $50.0 million, an increase of 51 percent over the first
quarter of 2006, while professional services revenues for the quarter were
$5.3 million, an increase of 17 percent over the first quarter of 2006. The
increase in revenue was driven by strong growth in Blackboard's annual
licensing of enterprise level products and ASP hosting service to global
academic institutions including clients resulting from the acquisition of
WebCT, Inc.
Net income was $1.9 million, resulting in net income per basic and diluted
share of $0.07 for the first quarter of 2007 compared to net income of
$148,000 and net income per basic and diluted share of $0.01 for the first
quarter of 2006. Non-GAAP adjusted net income for the first quarter of 2007,
which excludes the amortization of acquisition-related intangible assets, net
of taxes, was $5.2 million, resulting in non-GAAP adjusted net income per
share of $0.18 compared to non-GAAP adjusted net income of $1.2 million and
Non-GAAP adjusted net income per share of $0.04 for the first quarter of 2006.
"As our first quarter financial performance reflects, we are off to a
great start in 2007," said Michael Chasen, chief executive officer and
president for Blackboard. "In the quarter, I was very pleased with the success
we had in expanding our business relationships with U.S. and international
higher education institutions."
Highlights from the First Quarter of 2007
-- A few of Blackboard's new and expanded client relationships in the
quarter included:
-- U.S. Higher Education: Alamo Community Colleges, Campbell
University, Lincoln Memorial University, Madonna University,
Mississippi State University, Northeast Mississippi Community
College, Shaw University, University of Central Oklahoma,
University of Hartford, University of West Alabama and others.
-- International: Bath Spa University, Fukushima University, Leiden
University, Niigata University, Okinawa National College of
Technology, Oxford Brookes University, Takushoku University,
Universidad Javeriana, University of New England - Australia,
University of Southern Denmark and others.
-- K-12: Anne Arundel County Public Schools (MD), Branksome Hall
(Toronto, Canada), Clark County Public Schools (NV), Fairfield
College Prep (CT), Phillips Academy Andover (MA), Riverside Unified
School District (CA) and others.
-- Blackboard's enterprise licenses (Blackboard Learning System(TM) -
Enterprise, Blackboard Community System(TM), Blackboard Transaction
System(TM), Blackboard Content System(TM) and Blackboard Outcomes
System(TM)), totaled 3,560 at the end of the quarter, representing an
increase of 14 percent over the first quarter of 2006.
-- Blackboard released the Blackboard Outcomes System which helps academic
institutions make evidence-based decisions, streamline assessment
processes and engage students.
-- Blackboard launched Scholar(R), a free, innovative social bookmarking
Web service, aimed at connecting faculty and students and enhancing
teaching and learning. This new tool enables millions of Blackboard
users to connect on a regular basis across institutions and share
resources.
Outlook for the Second Quarter and Full Year of 2007
Second Quarter of 2007:
-- Revenue of $58.0 to $59.0 million;
-- Amortization of acquired intangibles of approximately $5.5 million;
-- Net income of $2.5 to $3.0 million, resulting in net income per diluted
share of $0.08 to $0.10, which is based on an estimated 29.7 million
diluted shares and an effective tax rate of 41.5 percent; and
-- Non-GAAP adjusted net income, excluding the amortization of acquired
intangibles and the associated tax impact, of $5.8 to $6.3 million,
resulting in non-GAAP adjusted net income per diluted share of $0.19 to
$0.21 based on an estimated 29.7 million diluted shares and an
effective tax rate of 40.5 percent.
Full Year 2007:
-- Revenue of $233.0 to $236.0 million;
-- Amortization of acquired intangibles of approximately $22.0 million;
-- Net income of $10.6 to $12.1 million, resulting in net income per
diluted share of $0.35 to $0.41, which is based on an estimated 29.9
million diluted shares and an effective tax rate of 41.5 percent; and
-- Non-GAAP adjusted net income excluding the amortization of acquired
intangibles and the associated tax impact, of $23.9 to $25.4 million,
resulting in non-GAAP adjusted net income per diluted share of $0.80 to
$0.85 based on an estimated 29.9 million diluted shares and an
effective tax rate of 40.5 percent.
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
7:00 p.m. Eastern (4:00 p.m. Pacific) on May 2, 2007 until 11:00 p.m. Eastern
(8:00 p.m. Pacific) on May 9, 2007. 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 80031470.
BLACKBOARD INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
Three Months Ended
March 31,
-----------------------------
2006 2007
----------- -----------
(unaudited) (unaudited)
Revenues:
Product $33,174 $49,981
Professional services 4,534 5,299
----------- -----------
Total revenues 37,708 55,280
Operating expenses:
Cost of product revenues, excludes
$933 and $2,825 in amortization of
acquired technology included in
amortization of intangibles
resulting from acquisitions shown
below for the three months ended
March 31, 2006 and 2007,
respectively (1) 7,966 11,697
Cost of professional services
revenues (1) 3,391 3,764
Research and development (1) 4,884 6,953
Sales and marketing (1) 12,149 14,546
General and administrative (1) 7,600 9,317
Amortization of intangibles
resulting from acquisitions 1,837 5,399
----------- -----------
Total operating expenses 37,827 51,676
----------- -----------
(Loss) income from operations (119) 3,604
Other income (expense):
Interest expense (578) (758)
Interest income 1,241 405
Other (expense) income (326) 73
----------- -----------
Income before provision for income taxes 218 3,324
Provision for income taxes (70) (1,380)
----------- -----------
Net income $148 $1,944
=========== ===========
Net income per common share:
Basic $0.01 $0.07
=========== ===========
Diluted $0.01 $0.07
=========== ===========
Weighted average number of common shares:
Basic 27,577,200 28,351,872
=========== ===========
Diluted 28,757,423 29,428,043
=========== ===========
(1) Includes the following amounts
related to stock-based compensation:
Cost of product revenues $35 $129
Cost of professional services
revenues 118 116
Research and development 122 117
Sales and marketing 407 491
General and administrative 817 1,359
Reconciliation of income before provision for
income taxes to non-GAAP cash net income (2):
Income before provision for income
taxes $218 $3,324
Add: Amortization of intangibles
resulting from acquisitions 1,837 5,399
Adjusted provision for income taxes (3) (812) (3,512)
----------- -----------
Non-GAAP adjusted net income $1,243 $5,211
=========== ===========
Non-GAAP adjusted net income per
common share - diluted $0.04 $0.18
=========== ===========
(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 39.5% and 40.3% for the three months ended March 31, 2006 and 2007,
respectively.
BLACKBOARD INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, March 31,
2006 2007
------------ ------------
(unaudited)
(in thousands,
except per share amounts)
ASSETS
Current assets:
Cash and cash equivalents $30,776 $25,881
Accounts receivable, net 52,394 40,642
Inventories 2,377 2,060
Prepaid expenses and other current
assets 3,514 3,599
Deferred tax asset, current portion 7,326 8,480
Deferred cost of revenues, current
portion 7,983 7,018
------------ ------------
Total current assets 104,370 87,680
Deferred tax asset, noncurrent portion 25,431 20,027
Deferred cost of revenues, noncurrent
portion 4,253 3,984
Restricted cash 1,999 2,337
Property and equipment, net 12,761 12,691
Goodwill 101,644 105,730
Intangible assets, net 56,841 54,029
------------ ------------
Total assets $307,299 $286,478
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,238 $4,068
Accrued expenses 20,519 15,266
Term loan, current portion 246 196
Deferred rent, current portion 371 295
Deferred revenues, current portion 117,972 96,070
------------ ------------
Total current liabilities 141,346 115,895
Term loan, noncurrent portion, net of
debt discount 23,377 18,638
Deferred rent, noncurrent portion 157 127
Deferred revenues, noncurrent portion 2,298 3,412
Stockholders' equity:
Common stock, $0.01 par value 282 285
Additional paid-in capital 231,331 238,242
Accumulated deficit (91,492) (90,121)
------------ ------------
Total stockholders' equity 140,121 148,406
------------ ------------
Total liabilities and stockholders'
equity $307,299 $286,478
============ ============
BLACKBOARD INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
March 31,
-----------------------------
2006 2007
------------ -----------
(unaudited) (unaudited)
(in thousands)
Cash flows from operating activities
Net income $148 $1,944
Adjustments to reconcile net income to
net cash (used in) provided by
operating activities:
Deferred income tax benefit (203) 4,819
Excess tax benefits from stock-based
compensation - (1,568)
Amortization of debt discount 34 211
Depreciation and amortization 1,902 2,512
Amortization of intangibles
resulting from acquisitions 1,837 5,399
Change in allowance for doubtful
accounts (9) 43
Noncash stock-based compensation 1,499 2,212
Changes in operating assets and
liabilities:
Accounts receivable 4,231 11,709
Inventories (541) 317
Prepaid expenses and other current
assets 426 (85)
Deferred cost of revenues 734 1,234
Accounts payable 335 1,830
Accrued expenses (9,061) (8,792)
Deferred rent 124 (106)
Deferred revenues (11,479) (20,788)
------------ -----------
Net cash (used in) provided by
operating activities (10,023) 891
Cash flows from investing activities
Acquisition of WebCT, Inc., net of
cash acquired (154,628) -
Purchase of property and equipment (1,569) (2,417)
Payments for patent enforcement costs - (1,233)
Purchase of intangible assets - (1,500)
Sale of held-to-maturity securities 23,546 -
Sale of available-for-sale
securities 39,056 -
------------ -----------
Net cash used in investing activities (93,595) (5,150)
Cash flows from financing activities
Proceeds from revolving credit
facility 10,000 -
Payments on revolving credit
facility (10,000) -
Proceeds from term loan 57,522 -
Payments on term loan (150) (5,000)
Payments on letters of credit - (338)
Excess tax benefits from stock-based
compensation - 1,568
Proceeds from exercise of stock
options 2,897 3,134
------------ -----------
Net cash provided by (used in)
financing activities 60,269 (636)
------------ -----------
Net decrease in cash and cash
equivalents (43,349) (4,895)
Cash and cash equivalents at beginning
of period 75,895 30,776
------------ -----------
Cash and cash equivalents at end of
period $32,546 $25,881
============ ===========
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
amortization of acquired intangibles and the associated tax impact, provide
additional useful information to investors regarding the Company's ongoing
financial condition and results of operations and aspects of current operating
performance which can be effectively managed. Since 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 consistency 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
excludes amortization of acquired intangibles and the associated tax impact.
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 23,
2007, as well as other filings with the Securities and Exchange Commission
when assessing the Company's financial condition and results of operations.
About Blackboard Inc.
Blackboard Inc. (Nasdaq: BBBB) is a leading provider of enterprise
software applications and related services to the education industry. Founded
in 1997, Blackboard enables educational innovations everywhere by connecting
people and technology. Millions of people use Blackboard everyday at academic
institutions around the globe, including colleges, universities, K-12 schools
and other education providers, as well as textbook publishers and student-
focused merchants that serve education providers and their students.
Blackboard is headquartered in Washington, D.C., with offices in North
America, Europe, Australia and Asia.
www.blackboard.com
Blackboard
Educate. Innovate. Everywhere.(TM)
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 23, 2007 with the SEC. In addition, the forward-
looking statements included in this press release represent the Company's
views as of May 2, 2007. 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 2, 2007.
SOURCE Blackboard Inc.
-0- 05/02/2007
/CONTACT: Michael J. Stanton, Vice President, Investor Relations of
Blackboard Inc., +1-202-463-4860 ext. 2305/
/Web site: http://www.blackboard.com
http://investor.blackboard.com /
(BBBB)
CO: Blackboard Inc.
ST: District of Columbia
IN: STW CPR
SU: ERN ERP CCA
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-- NEW133 --
0875 05/02/2007 16:18 EDT http://www.prnewswire.com