May 2, 2013

Daniel Island-Based Software Maker Blackbaud Reports Quarterly Earnings

Brendan Kearney  /  Post and Courier

It's been a year since Daniel Island-based Blackbaud completed the biggest acquisition in its history: former Texas rival Convio.

Just how well the combined software company has been faring recently, as reflected in Wednesday's quarterly financial report, is a matter of perspective.

According to standard accounting, first-quarter revenues were $115.6 million, up 22 percent from the same period last year. Quarterly income from operations and net income were down, however, and earnings per share were flat.

But according to Blackbaud's accounting method, which excludes various costs related to the acquisition, income from operations, net income and earnings per share were all up from the first quarter of 2012. Company executives and investors seemed pleased.

Shares of Blackbaud jumped $1, or 3.4 percent to close at $30.31 on Wednesday.

During a conference call earlier in the day, CEO Marc Chardon said the earning's report represented a "solid start" to 2013.

While Blackbaud's nonprofit customers continue to face a "challenging environment" of modest charitable giving and decreased government support, that provides an opportunity for the company to sell its fundraising software, he said.

Among the company's product priorities this year are further linking its legacy Raiser's Edge and Convio's Luminate products and developing more donor analytic tools, Chardon said. Blackbaud also hopes to expand its Australia-based Everyday Hero platform onto other countries.

"I remain optimistic about the overall market opportunity for the company," he said.

Finance chief Tony Boor noted 150 job cuts in January, a third of which were at the company's local headquarters, postponed some investments and hiring planned for the quarter. Blackbaud has about 2,600 employees, including more than 1,000 at its Daniel Island headquarters, and is hiring in the areas of sales, marketing and product development.

Boor also noted his ongoing transformation of the company's back-office systems is progressing under a newly hired controller and will pay off in the long term.

"We believe we are well positioned to deliver on our full-year financial targets," he said.

Blackbaud's board of directors has approved a quarterly dividend of 12 cents per share payable June 14 to stockholders of record on May 28, 2013.

In January, the company announced Chardon would be stepping down sometime this year. On Wednesday, Chardon implied Blackbaud is still months away from a new CEO: the board is still figuring out which candidates to interview, and he expects to preside over the next earnings call in August.

Other developments

Blackbaud's San Diego office is shrinking its footprint and headcount. When the lease is up at the end of June, Blackbaud will move into 6,000 square feet from 30,000, said spokeswoman Melanie Mathos. Also, the number of employees will go to 77 from 130, with some working from home or transferring to other offices and 40 taking a severance package.

Blackbaud is moving its 125-person Indianapolis-area office to a bigger space closer to the state capital. Mathos said the new location has more amenities and will be "more attractive from a recruiting perspective." At home, Berkeley County has approved an incentive package for "expansion of certain facilities" by Blackbaud. Mathos would only say the expansion is "focused on assets related to software production." County economic development director Gene Butler said Blackbaud is investing.