May 1, 2009

Blackbaud Reports 1st Quarter Profit Of $4.1M

John P. McDermott  /  Post and Courier

First-quarter earnings at Blackbaud Inc. skidded 42 percent but beat expectations amid a bruising economic environment for the company and its customers, the local technology firm said Thursday.

Net income at the Charleston-based financial software maker was $4.1 million for the period ended March 31, compared to slightly more than $7 million for the first three months of 2008. On a per-share basis, Blackbaud's profit was 19 cents, beating Thomson Reuter's consensus of analysts by three cents. Sales rose about 8 percent to $74.7 million for the quarter, driven mainly by subscriptions and maintenance services. While at the high end of the company's estimate, revenue came up $1 million short of what analysts had expected. Blackbaud makes software specifically for nonprofit groups. The Daniel Island company also offers technical services to those organizations, which have been squeezed financially as donors of all sizes tighten their purse strings.

"While our first quarter results were better-than-expected, the market environment remains challenging as the difficult and uncertain economic conditions continue to put pressure on the spending of many organizations in the nonprofit industry," Marc Chardon, chief executive, said in a statement. "We will continue to manage our expenses carefully, but we will also continue to invest in the strategic growth initiatives that are contributing to our short-term business and, more importantly, position the company for enhanced long-term growth."

Chardon said in conference call that the results were helped by a "fortuitous" burst of business activity late in the first quarter, but stressed that he's "not counting on it to reoccur" this quarter. He said customers told him they had grown "tired of waiting" for the economy to turn and decided to go ahead with their purchases anyway.

Timothy V. Williams, chief financial officer, said Blackbaud's second-quarter revenue is expected to be between $76.5 million and $78.5 million, while earnings are projected to total 21 to 22 cents a share. Separately, the company said it added to its global business by acquiring RLC CCT for $2.3 million. The 25-worker Dutch firm provides software and services to nonprofit groups in the Netherlands and is "modestly profitable," Williams said.

Also, Blackbaud declared a quarterly dividend of 10 cents a share payable June 15 to stockholders of record as of May 28. The company released earnings after the U.S. markets closed Thursday. Its stock declined 8 cents to $15.22.