CHARLESTON, S.C., Nov 01, 2011 (BUSINESS WIRE) --

Blackbaud, Inc. (Nasdaq: BLKB), the leading provider of software and related services designed specifically for nonprofit organizations, today announced financial results for its third quarter ended September 30, 2011.

Marc Chardon, Chief Executive Officer of Blackbaud, stated, "Solid execution during the third quarter enabled Blackbaud to deliver organic revenue growth of 12% and total revenue growth of 15%. We believe the company remains well positioned to deliver low double digit organic revenue growth and mid-teens total revenue growth for the full year 2011. This would represent a meaningful acceleration in growth from the 5% level in 2010, in spite of the continued challenging economic environment."

"During the third quarter, we closed a record 7 new Enterprise CRM deals as Blackbaud continues to expand its growing leadership position at the high-end of the nonprofit market. Our Enterprise CRM wins continue to be diversified across our major nonprofit sub-verticals, and two of our third quarter wins were with international nonprofit organizations," Chardon added. "Our General Markets Business Unit is also executing at a high level, delivering strong growth and gaining significant market share in the mid-market. Blackbaud has created a strong market leadership position in the mid-market over several decades, and we believe it remains a large and underpenetrated market opportunity."

Blackbaud reported total revenue of $95.5 million for the quarter ended September 30, 2011, an increase of 15% compared to $83.2 million for the third quarter of 2010. Income from operations and net income, determined in accordance with GAAP, were $15.7 million and $9.8 million, respectively, compared with $13.1 million and $8.5 million, respectively, for the third quarter of 2010. Diluted earnings per share were $0.22 for the quarter ended September 30, 2011 compared with $0.20 in the same period last year.

Non-GAAP income from operations, which excludes stock-based compensation expense and amortization of intangibles arising from business combinations, was $21.1 million, an increase of 17% compared to $18.0 million in the same period last year. Non-GAAP net income was $12.8 million for the quarter ended September 30, 2011, an increase of 16% compared to $11.0 million in the same period last year. Non-GAAP diluted earnings per share were $0.29 for the quarter ended September 30, 2011, an increase of 16% compared with $0.25 in the same period last year.

The company's third quarter 2011 results include an adjustment to lengthen the amortization period of the initial set-up fees associated with certain subscription based offerings as analysis indicated that the average life of related customer relationships is longer than previously estimated. This adjustment reduced third quarter revenue by approximately $700,000, non-GAAP operating income by approximately $400,000 and non-GAAP diluted earnings per share by $0.01.

A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."

The Company ended the third quarter with $52.0 million in cash, an increase from $33.4 million at the end of the previous quarter. The company generated $67.7 million in cash from operations for the nine months ended September 30, 2011, an increase of 38% compared to the same period last year.

Timothy V. Williams, Chief Financial Officer of Blackbaud, said, "In addition to re-accelerating revenue growth, the company has been able to start the process of re-expanding margins modestly during 2010. The third quarter represented the highest quarterly non-GAAP operating margin since 2009, and contributed to 40 basis points of margin expansion for the first nine months of the year as compared to 2010. We remain confident in the company's ability to expand margins modestly over the next several years as our business continues to scale and the economic environment eventually improves."

Fourth Quarter 2011 Dividend and Share Repurchase Program

Blackbaud announced today that its Board of Directors has approved a fourth quarter dividend of $0.12 per share payable on December 15, 2011, to stockholders of record on November 28, 2011. Additionally, as of September 30, 2011, $50.0 million remained available under the Company's share repurchase program, which became effective on August 1, 2010.

Conference Call Details

Blackbaud will host a conference call today, November 1, 2011, at 5:00 p.m. (Eastern Time) to discuss the Company's financial results, operations and related matters. To access this call, dial 888-364-3109 (domestic) or 719-325-2497 (international). A replay of this conference call will be available through November 8, 2011, at 877-870-5176 (domestic) or 858-384-5517 (international). The replay passcode is 4844367. 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.

About Blackbaud

Serving the nonprofit and education sectors for 30 years, Blackbaud (NASDAQ: BLKB) combines technology and expertise to help organizations achieve their missions. Blackbaud works with more than 25,000 customers in over 60 countries that support higher education, healthcare, human services, arts and culture, faith, the environment, independent K-12 education, animal welfare, and other charitable causes. The company offers a full spectrum of cloud-based and on-premise software solutions and related services for organizations of all sizes including: fundraising, eMarketing, social media, advocacy, constituent relationship management (CRM), analytics, financial management, and vertical-specific solutions. Using Blackbaud technology, these organizations raise more than $100 billion each year. Recognized as a top company by Forbes, InformationWeek, and Software Magazine and honored by Best Places to Work, Blackbaud is headquartered in Charleston, South Carolina and has employees throughout the US, and in Australia, Canada, Hong Kong, Mexico, the Netherlands, and the United Kingdom. For more information, visit www.blackbaud.com.

Forward-looking Statements

Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements that 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: general economic risks; uncertainty regarding increased business and renewals from existing customers; continued success in sales growth; management of integration of acquired companies and other risks associated with acquisitions; risks associated with successful implementation of multiple integrated software products; the ability to attract and retain key personnel; risks related to our dividend policy and share repurchase program, including potential limitations on our ability to grow and the possibility that we might discontinue payment of dividends; risks relating to restrictions imposed by the credit facility; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organizations; technological changes that make our products and services less competitive; 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. 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 income from operations and margin, non-GAAP net income and non-GAAP diluted earnings per share. 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 an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial results with other companies in Blackbaud's industry, many of which present similar non-GAAP financial measures to investors. As noted, the non-GAAP financial results discussed above exclude stock-based compensation expense, costs associated with amortization of intangibles arising from business combinations, one-time write-offs or expenses incurred in connection with acquisitions and a gain in connection with the sale of a business.

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. As previously mentioned, 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.

SOURCE: Blackbaud, Inc.

Investor Contact:
ICR
Tim Dolan, 617-956-6727
timothy.dolan@icrinc.com
or
Media Contact:
Blackbaud, Inc.
Melanie Mathos, 843-216-6200 x3307
melanie.mathos@Blackbaud.com