þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the Fiscal Year ended December 31, 2015
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OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ___________________ to ___________________.
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Delaware
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11-2617163
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Securities Registered Pursuant to Section 12(b) of the Act:
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Title of Each Class
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Name of Each Exchange on which Registered
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Common Stock, $0.001 Par Value
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The NASDAQ Stock Market LLC
(NASDAQ Global Select Market)
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Securities Registered Pursuant to Section 12(g) of the Act:
None
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Large accelerated filer
þ
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Accelerated filer
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¨
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Item 12.
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Security ownership of certain beneficial owners and management and related stockholder matters
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Item 13.
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Certain relationships and related transactions, and director independence
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Item 14.
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Principal accountant fees and services
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2015 Form 10-K
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1
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2
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2015 Form 10-K
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•
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Solicit funds and build relationships with major donors;
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•
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Garner small cash contributions from numerous contributors;
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•
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Manage and develop complex relationships with large numbers of constituents;
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•
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Communicate their accomplishments and the importance of their mission online and offline;
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•
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Comply with complex accounting, tax and reporting requirements that differ from those for traditional businesses;
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•
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Solicit cash and in-kind contributions from businesses to help raise money or deliver products and services;
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•
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Provide a wide array of programs and services to individual constituents; and
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2015 Form 10-K
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3
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•
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Improve the data collection and information sharing capabilities of their employees, volunteers and donors by creating and providing distributed access to centralized databases.
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Quantify and improve the impact of their grants;
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Cultivate better relationships with grantees;
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Achieve better internal collaboration and alignment with board members, reviewers, and other stakeholders;
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Illustrate the impact of their corporate philanthropy efforts to the communities they serve;
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•
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Engage employees in meaningful volunteering, giving and other activities;
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•
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Ensure that their philanthropic efforts align with their business initiatives;
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Manage all of a foundation's activities, including fundraising and accounting;
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Expand the reach of their fundraising efforts; and
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•
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Cultivate new and existing donors.
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1.
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Integrated and Open Solutions in the Cloud
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2.
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Drive Sales Effectiveness
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4
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2015 Form 10-K
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3.
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Expand TAM into Near Adjacencies with Acquisitions
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4.
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Streamline Operations
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5.
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Execute our 3-Year Margin Improvement Plan
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•
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The GMBU is focused on marketing, sales, delivery and support to all emerging and mid-sized prospects and customers in North America.
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•
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The ECBU is focused on marketing, sales, delivery and support to large and/or strategic prospects and customers in North America.
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•
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The IBU is focused on marketing, sales, delivery and support to all prospects and customers outside of North America.
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2015 Form 10-K
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5
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•
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Fundraising & Relationship Management;
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•
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Analytics & Business Intelligence;
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•
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Communication & Marketing;
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•
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Finance & Operations;
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•
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K-12 Private Schools;
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•
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Arts and Cultural;
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•
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Customer Support and Maintenance;
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•
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Payment Processing;
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•
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Professional Services;
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•
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Training; and
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•
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CSR.
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6
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2015 Form 10-K
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2015 Form 10-K
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7
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8
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2015 Form 10-K
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2015 Form 10-K
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9
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•
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System implementation;
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•
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Data conversion, business process analysis and application customization;
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•
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Database merging and enrichment, and secure credit card transaction processing;
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•
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Database production activities; and
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•
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Website design services.
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10
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2015 Form 10-K
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2015 Form 10-K
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11
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•
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Flexible.
Our component-based architecture is programmable and easily customized by our customers without requiring modification of the source code, ensuring that the technology can be extended to accommodate changing demands of our customers and the market.
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Adaptable.
The architecture of our applications allows us to easily add features and functionality or to integrate with third-party applications in order to adapt to our customers' needs or market demands.
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Scalable.
We combine a scalable architecture with the performance, capacity and load balancing of industry-standard web servers and databases used by our customers to ensure that the applications can scale to the needs of larger organizations.
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12
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2015 Form 10-K
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Name
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Age
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Title
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Michael P. Gianoni
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55
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President and Chief Executive Officer
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Anthony W. Boor
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53
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Executive Vice President and Chief Financial Officer
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Charles T. Cumbaa
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63
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Executive Vice President of Corporate and Product Strategy
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Kevin W. Mooney
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57
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Executive Vice President and President, General Markets Business Unit
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Brian E. Boruff
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56
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Executive Vice President and President, Enterprise Customer Business Unit
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John J. Mistretta
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60
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Executive Vice President of Human Resources
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2015 Form 10-K
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13
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•
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Software developers offering specialized products designed to address specific needs of nonprofit organizations;
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•
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Custom-developed products created either internally or outsourced to custom service providers;
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•
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Providers of traditional, less automated fundraising services, such as services that support traditional direct mail or email campaigns, special events fundraising, telemarketing and personal solicitations; and
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•
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Software developers offering general products not designed to address specific needs of organizations in the philanthropic community.
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14
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2015 Form 10-K
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•
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Our customers' budgetary constraints;
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•
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The impact of the macroeconomic environment on our customers; and
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•
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The timing and expiration of our customers' current arrangements for similar services.
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2015 Form 10-K
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15
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16
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2015 Form 10-K
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2015 Form 10-K
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17
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18
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2015 Form 10-K
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2015 Form 10-K
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19
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•
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Differing technology standards;
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•
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Imposition of currency exchange controls;
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•
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Potentially adverse tax consequences;
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•
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Reduced protection for intellectual property rights in certain countries;
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Compliance with multiple conflicting and changing governmental laws and regulations;
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•
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Seasonal reductions in business activity specific to certain markets;
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•
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Restrictions on repatriation of earnings;
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•
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Differing labor regulations;
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•
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Differing accounting rules and practices;
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Restrictive and varying privacy regulations in different countries, particularly in the European Union;
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•
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Restrictions on the export of technologies such as data security and encryption; and
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•
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Import and export restrictions and tariffs.
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20
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2015 Form 10-K
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•
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Difficulties or delays in integrating operations, technologies, services, accounting and personnel;
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•
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Difficulties in supporting and transitioning customers of our acquired companies;
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•
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Diversion of financial and management resources from existing operations;
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•
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Risks of entering new sectors of the nonprofit, charitable giving and educational industries;
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•
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Potential loss of key employees; and
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•
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Inability to generate sufficient return on investment.
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•
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Requiring us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions, dividends and other general corporate purposes;
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•
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Limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate;
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•
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Restricting us from making additional strategic acquisitions or exploiting business opportunities;
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•
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Placing us at a competitive disadvantage compared to our competitors that have less debt;
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•
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Limiting our ability to borrow additional funds; and
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•
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Decreasing our ability to compete effectively or operate successfully under adverse economic and industry conditions.
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2015 Form 10-K
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21
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•
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Changes in general economic conditions and conditions in the markets we serve;
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•
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Costs related to acquisitions of technologies or businesses;
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•
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The growth rates of certain market segments in which we compete;
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•
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Market acceptance of new solutions we release or acquire;
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•
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The amount and timing of operating costs and capital expenditures related to the operations and expansion of our business;
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•
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Budget and spending decisions by our customers;
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•
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The size and timing of sales of our software, including the relatively long sales cycles associated with many of our larger software sales;
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•
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The degree of judgment required to estimate large consulting service engagements;
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•
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Scheduling considerations by our customers as they impact the delivery of purchased services;
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•
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Varying accounting treatments based upon the facts and circumstances of each arrangement;
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•
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Utilization of our professional services personnel;
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•
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Changes in our pricing policies and terms of contracts, whether initiated by us or as a result of competition;
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•
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The rate of expansion and productivity of our sales force and the impact of reorganizations of our sales force;
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•
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Technical difficulties or interruptions in our service;
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•
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Changes in foreign currency exchange rates;
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22
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2015 Form 10-K
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•
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Changes in the effective tax rates due to changes in the mix of earnings and losses in countries with differing statutory tax rates, certain non-deductible expenses, changes in the valuation of deferred tax assets and liabilities and our ability to utilize them, changes in federal, state or international tax laws and accounting principles, changes in judgment from the evaluation of new information that results in a recognition, derecognition or change in measurement of a tax position taken in a prior period, results of tax examinations by local and foreign taxing authorities;
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•
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Expenses related to significant, unusual or discrete events which are recorded in the period in which the events occur;
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•
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Regulatory compliance costs; and
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•
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Extraordinary expenses such as litigation or other dispute-related settlement payments.
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2015 Form 10-K
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23
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24
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2015 Form 10-K
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•
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User privacy;
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•
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Payment processing and related interchange rates;
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•
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Merchant surcharge limits;
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•
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Taxation of foreign earnings; and
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•
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Consumer protection, including the potential application of “do not call” registry requirements on our customers and consumer backlash in general to direct marketing efforts of our customers.
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2015 Form 10-K
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25
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26
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2015 Form 10-K
|
|
Common Stock
Market Prices
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|||||||
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High
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Low
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Dividends Declared
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|||
Fiscal year ended December 31, 2015
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||||||
Fourth quarter
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$
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67.54
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$
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56.17
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$
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0.12
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Third quarter
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63.73
|
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54.10
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0.12
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|||
Second quarter
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59.67
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47.39
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0.12
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First quarter
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47.45
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42.00
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0.12
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|||
Fiscal year ended December 31, 2014
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||||||
Fourth quarter
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$
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45.86
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$
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37.38
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$
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0.12
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Third quarter
|
40.99
|
|
33.62
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|
0.12
|
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|||
Second quarter
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36.33
|
|
29.42
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|
0.12
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|||
First quarter
|
38.84
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29.99
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|
0.12
|
|
2015 Form 10-K
|
|
27
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December 31,
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||||||||
Blackbaud, Inc.
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$
|
100.00
|
|
|
$
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108.97
|
|
|
$
|
91.50
|
|
|
$
|
153.20
|
|
|
$
|
178.39
|
|
|
$
|
274.57
|
|
NASDAQ Composite Index
|
100.00
|
|
|
100.53
|
|
|
116.92
|
|
|
166.19
|
|
|
188.78
|
|
|
199.95
|
|
||||||
NASDAQ Computer & Data Processing Index
|
100.00
|
|
|
100.83
|
|
|
108.27
|
|
|
165.81
|
|
|
190.41
|
|
|
224.42
|
|
28
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2015 Form 10-K
|
Period
|
|
Total
number
of shares
purchased
|
|
|
Average
price
paid
per
share
|
|
|
Total number
of shares
purchased as
part of
publicly
announced
plans or
programs
(1)
|
|
|
Approximate
dollar value
of shares
that may yet
be purchased
under the
plans or programs
(in thousands)
|
|
||
Beginning balance, October 1, 2015
|
|
|
|
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$
|
50,000
|
|
||||
October 1, 2015 through October 31, 2015
|
|
845
|
|
|
$
|
64.01
|
|
|
—
|
|
|
50,000
|
|
|
November 1, 2015 through November 30, 2015
|
|
105,920
|
|
|
62.67
|
|
|
—
|
|
|
50,000
|
|
||
December 1, 2015 through December 31, 2015
|
|
—
|
|
|
—
|
|
|
—
|
|
|
50,000
|
|
||
Total
|
|
106,765
|
|
|
$
|
62.70
|
|
|
—
|
|
|
$
|
50,000
|
|
(1)
|
In August 2010, our Board of Directors approved a stock repurchase program that authorized us to purchase up to $50.0 million of our outstanding shares of common stock. We have not made any repurchases under the program to date, and the program does not have an expiration date.
|
•
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Our credit facility limits the amount of dividends we are permitted to pay;
|
•
|
Our Board of Directors could decide to reduce dividends or not to pay dividends at all, at any time and for any reason;
|
•
|
The amount of dividends distributed is subject to state law restrictions (as discussed below); and
|
•
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We might not have enough cash to pay dividends due to changes to our operating earnings, working capital requirements and anticipated cash needs.
|
2015 Form 10-K
|
|
29
|
30
|
|
2015 Form 10-K
|
|
Year ending December 31,
|
||||||||||||||||||
(in thousands, except per share data)
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
SUMMARY OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenue
|
$
|
637,940
|
|
|
$
|
564,421
|
|
|
$
|
503,817
|
|
|
$
|
447,419
|
|
|
$
|
370,868
|
|
Total cost of revenue
|
304,631
|
|
|
273,438
|
|
|
232,663
|
|
|
202,460
|
|
|
157,194
|
|
|||||
Gross profit
|
333,309
|
|
|
290,983
|
|
|
271,154
|
|
|
244,959
|
|
|
213,674
|
|
|||||
Total operating expenses
|
286,597
|
|
|
244,619
|
|
|
219,612
|
|
|
225,524
|
|
|
162,746
|
|
|||||
Income from operations
|
46,712
|
|
|
46,364
|
|
|
51,542
|
|
|
19,435
|
|
|
50,928
|
|
|||||
Net income
|
25,649
|
|
|
28,290
|
|
|
30,472
|
|
|
6,583
|
|
|
33,220
|
|
|||||
PER SHARE DATA
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic net income
|
$
|
0.56
|
|
|
$
|
0.63
|
|
|
$
|
0.68
|
|
|
$
|
0.15
|
|
|
$
|
0.76
|
|
Diluted net income
|
0.55
|
|
|
0.62
|
|
|
0.67
|
|
|
0.15
|
|
|
0.75
|
|
|||||
Cash dividends
|
0.48
|
|
|
0.48
|
|
|
0.48
|
|
|
0.48
|
|
|
0.48
|
|
|||||
BALANCE SHEET DATA
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
1,223,853
|
|
|
$
|
943,183
|
|
|
$
|
706,610
|
|
|
$
|
705,747
|
|
|
$
|
392,590
|
|
Deferred revenue, including current portion
|
237,335
|
|
|
221,274
|
|
|
190,574
|
|
|
185,018
|
|
|
163,437
|
|
|||||
Total debt, including current portion
|
408,604
|
|
|
280,571
|
|
|
152,908
|
|
|
215,500
|
|
|
—
|
|
|||||
Total long-term liabilities
|
446,967
|
|
|
336,263
|
|
|
188,384
|
|
|
246,368
|
|
|
12,547
|
|
2015 Form 10-K
|
|
31
|
1.
|
Integrated and Open Solutions in the Cloud
|
2.
|
Drive Sales Effectiveness
|
3.
|
Expand TAM into Near Adjacencies with Acquisitions
|
4.
|
Streamline Operations
|
32
|
|
2015 Form 10-K
|
5.
|
Execute our 3-Year Margin Improvement Plan
|
Total revenue
|
|
|
|
|
|||||
|
|
|
|
|
|||||
Years ended December 31,
|
|
|
|
|
|||||
(dollars in millions)
|
2015
(1)
|
Change
|
|
2014
(2)
|
|||||
Total revenue
|
$
|
637.9
|
|
13.0
|
%
|
|
$
|
564.4
|
|
(1)
|
Included in total revenue for 2015 was
$31.9 million and $8.5 million attributable to the inclusion of MicroEdge and Smart Tuition, respectively. WhippleHill also positively impacted total revenue for 2015.
|
(2)
|
Included in total revenue for 2014 was
$4.5 million and $5.8 million attributable to the inclusion of WhippleHill and MicroEdge, respectively.
|
2015 Form 10-K
|
|
33
|
Income from operations
|
|
|
|
|
|||||
|
|
||||||||
Years ended December 31,
|
|
|
|
|
|||||
(dollars in millions)
|
2015
|
Change
|
|
2014
|
|||||
Income from operations
|
$
|
46.7
|
|
0.6
|
%
|
|
$
|
46.4
|
|
34
|
|
2015 Form 10-K
|
•
|
Smart, LLC ("Smart Tuition") – October 2, 2015;
|
•
|
MicroEdge Holdings, LLC (“MicroEdge”) – October 1, 2014;
|
•
|
WhippleHill Communications, Inc. (“WhippleHill”) – June 16, 2014; and
|
•
|
MyCharity, Ltd. (“MyCharity”) – March 6, 2013.
|
(1)
|
Included in GMBU revenue for 2014 was $4.5 million attributable to the inclusion of WhippleHill. WhippleHill also positively impacted GMBU revenue and total revenue for 2015. Included in GMBU revenue for 2015 was $8.5 million attributable to the inclusion of Smart Tuition.
|
(2)
|
Included in ECBU revenue and total revenue for 2015 and 2014 was
$31.9 million and $5.8 million, respectively, attributable to the inclusion of MicroEdge.
|
(3)
|
Included in ECBU, GMBU, IBU and total revenue for 2014 was $6.8 million, $13.2 million, $1.1 million and $21.1 million, respectively, attributable to the prospective change in presentation from net to gross for revenue and costs associated with certain payment processing services as a result of certain third-party arrangements that had changes in contractual terms effective October 2013. These amounts make comparability of 2014 to 2013 less meaningful, as we accounted for these payments on a net basis prior to October 2013. The revenue for 2015 and 2014 are presented on a comparable basis.
|
(4)
|
The individual amounts for each year may not sum to total revenue due to rounding.
|
2015 Form 10-K
|
|
35
|
GMBU
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Years ended December 31,
|
|
|
|
|
|
|
|
||||||||
(dollars in millions)
|
2015
|
Change
|
|
2014
(2)
|
Change
|
|
2013
|
||||||||
GMBU revenue
(1)
|
$
|
313.9
|
|
16.0
|
%
|
|
$
|
270.6
|
|
12.6
|
%
|
|
$
|
240.4
|
|
% of total revenue
|
49.2
|
%
|
|
|
47.9
|
%
|
|
|
47.7
|
%
|
(1)
|
Included in GMBU revenue for 2014 was $4.5 million attributable to the inclusion of WhippleHill. WhippleHill also positively impacted GMBU revenue and total revenue for 2015. Included in GMBU revenue for 2015 was $8.5 million attributable to the inclusion of Smart Tuition.
|
(2)
|
Included in GMBU revenue for 2014 was $13.2 million attributable to the prospective change in presentation from net to gross for revenue and costs associated with certain payment processing services as a result of certain third-party arrangements that had changes in contractual terms effective October 2013. These amounts make comparability of 2014 to 2013 less meaningful, as we accounted for these payments on a net basis prior to October 2013. The revenue for 2015 and 2014 are presented on a comparable basis.
|
36
|
|
2015 Form 10-K
|
ECBU
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Years ended December 31,
|
|
|
|
|
|
|
|
||||||||
(dollars in millions)
|
2015
|
Change
|
|
2014
(2)
|
Change
|
|
2013
|
||||||||
ECBU revenue
(1)
|
$
|
279.9
|
|
14.2
|
%
|
|
$
|
245.1
|
|
11.6
|
%
|
|
$
|
219.7
|
|
% of total revenue
|
43.9
|
%
|
|
|
43.4
|
%
|
|
|
43.6
|
%
|
(1)
|
Included in ECBU revenue for 2015 and 2014 was
$31.9 million and $5.8 million, respectively, attributable to the inclusion of MicroEdge.
|
(2)
|
Included in ECBU revenue for 2014 was $6.8 million attributable to the prospective change in presentation from net to gross for revenue and costs associated with certain payment processing services as a result of certain third-party arrangements that had changes in contractual terms effective October 2013. These amounts make comparability of 2014 to 2013 less meaningful, as we accounted for these payments on a net basis prior to October 2013. The revenue for 2015 and 2014 are presented on a comparable basis.
|
2015 Form 10-K
|
|
37
|
IBU
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Years ended December 31,
|
|
|
|
|
|
|
|
||||||||
(dollars in millions)
|
2015
|
Change
|
|
2014
(1)
|
Change
|
|
2013
|
||||||||
IBU revenue
|
$
|
42.0
|
|
(10.8
|
)%
|
|
$
|
47.1
|
|
11.9
|
%
|
|
$
|
42.1
|
|
% of total revenue
|
6.6
|
%
|
|
|
8.3
|
%
|
|
|
8.4
|
%
|
(1)
|
Included in IBU revenue for 2014 was $1.1 million attributable to the prospective change in presentation from net to gross for revenue and costs associated with certain payment processing services as a result of certain third-party arrangements that had changes in contractual terms effective October 2013. These amounts make comparability of 2014 to 2013 less meaningful, as we accounted for these payments on a net basis prior to October 2013. The revenue for 2015 and 2014 are presented on a comparable basis.
|
38
|
|
2015 Form 10-K
|
Subscriptions
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Years ended December 31,
|
|
|
|
|
|
|
|
||||||||
(dollars in millions)
|
2015
|
Change
|
|
2014
(2)
|
Change
|
|
2013
|
||||||||
Subscriptions revenue
(1)
|
$
|
331.8
|
|
26.0
|
%
|
|
$
|
263.4
|
|
23.8
|
%
|
|
$
|
212.7
|
|
Cost of subscriptions
(3)
|
167.3
|
|
25.6
|
%
|
|
133.2
|
|
42.3
|
%
|
|
93.6
|
|
|||
Subscriptions gross profit
|
$
|
164.5
|
|
26.3
|
%
|
|
$
|
130.2
|
|
9.3
|
%
|
|
$
|
119.1
|
|
Subscriptions gross margin
|
49.6
|
%
|
|
|
49.4
|
%
|
|
|
56.0
|
%
|
(1)
|
Included in subscriptions revenue for 2015 was $18.2 million and $8.3 million attributable to the inclusion of MicroEdge and Smart Tuition, respectively. WhippleHill also positively impacted subscriptions revenue for 2015 when compared to 2014. Included in subscriptions revenue for 2014 was $3.0 million and $2.7 million attributable to the inclusion of MicroEdge and WhippleHill, respectively.
|
(2)
|
Included in subscriptions revenue and cost of subscriptions for 2014 was $21.1 million attributable to the prospective change in presentation from net to gross for revenue and costs associated with certain payment processing services as a result of certain third-party arrangements that had changes in contractual terms effective October 2013. These amounts make comparability of 2014 to 2013 less meaningful, as we accounted for these payments on a net basis prior to October 2013. The revenue for 2015 and 2014 are presented on a comparable basis.
|
(3)
|
Included in cost of subscriptions for 2014 was $1.2 million attributable to the inclusion of WhippleHill. The impact on cost of subscriptions in 2014 as a result of the inclusion of MicroEdge was not significant.
|
2015 Form 10-K
|
|
39
|
40
|
|
2015 Form 10-K
|
Maintenance
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Years ended December 31,
|
|
|
|
|
|
|
|
||||||||
(dollars in millions)
|
2015
|
Change
|
|
2014
|
Change
|
|
2013
|
||||||||
Maintenance revenue
(1)
|
$
|
153.8
|
|
4.3
|
%
|
|
$
|
147.4
|
|
6.3
|
%
|
|
$
|
138.7
|
|
Cost of maintenance
(2)
|
27.1
|
|
6.7
|
%
|
|
25.4
|
|
(1.2
|
)%
|
|
25.7
|
|
|||
Maintenance gross profit
|
$
|
126.7
|
|
3.9
|
%
|
|
$
|
122.0
|
|
8.0
|
%
|
|
$
|
113.0
|
|
Maintenance gross margin
|
82.4
|
%
|
|
|
82.7
|
%
|
|
|
81.4
|
%
|
(1)
|
Included in maintenance revenue for 2015 and 2014 was $11.0 million and $1.9 million, respectively, attributable to the inclusion of MicroEdge.
|
(2)
|
Included in cost of maintenance for 2014 was $0.6 million attributable to the inclusion of MicroEdge.
|
2015 Form 10-K
|
|
41
|
Services
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
Years ended December 31,
|
|
|
|
|
|
|
|
||||||
(dollars in millions)
|
2015
|
Change
|
|
2014
|
Change
|
|
2013
|
||||||
Services revenue
(1)
|
$
|
133.0
|
|
3.6%
|
|
$
|
128.4
|
|
1.5%
|
|
$
|
126.5
|
|
Cost of services
(2)
|
102.8
|
|
(3.5)%
|
|
106.5
|
|
2.4%
|
|
104.0
|
|
|||
Services gross profit
|
$
|
30.2
|
|
37.9%
|
|
$
|
21.9
|
|
(2.7)%
|
|
$
|
22.5
|
|
Services gross margin
|
22.7
|
%
|
|
|
17.0
|
%
|
|
|
17.8
|
%
|
(1)
|
Included in services revenue for 2015 was $1.8 million attributable to the inclusion of MicroEdge. The impact on services revenue in 2015 as a result of the inclusion of Smart Tuition was not significant. Included in services revenue for 2014 was $1.6 million attributable to the inclusion of WhippleHill. The impact on services revenue in 2014 as a result of the inclusion of MicroEdge was not significant.
|
(2)
|
Included in cost of services for 2014 was $2.5 million and $0.8 million attributable to the inclusion of WhippleHill and MicroEdge, respectively.
|
42
|
|
2015 Form 10-K
|
License fees and other
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Years ended December 31,
|
|
|
|
|
|
|
|
||||||||
(dollars in millions)
|
2015
|
Change
|
|
2014
|
Change
|
|
2013
|
||||||||
License fees and other revenue
|
$
|
19.4
|
|
(23.0
|
)%
|
|
$
|
25.2
|
|
(2.7
|
)%
|
|
$
|
25.9
|
|
Cost of license fees and other
|
7.4
|
|
(10.8
|
)%
|
|
8.3
|
|
(10.8
|
)%
|
|
9.3
|
|
|||
License fees and other gross profit
|
$
|
12.0
|
|
(29.0
|
)%
|
|
$
|
16.9
|
|
1.8
|
%
|
|
$
|
16.6
|
|
License fees and other gross margin
|
61.8
|
%
|
|
|
67.2
|
%
|
|
|
64.2
|
%
|
2015 Form 10-K
|
|
43
|
Sales and marketing
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Years ended December 31,
|
|
|
|
|
|
|
|
||||||||
(dollars in millions)
|
2015
|
Change
|
|
2014
|
Change
|
|
2013
|
||||||||
Sales and marketing expense
|
$
|
123.6
|
|
15.1
|
%
|
|
$
|
107.4
|
|
10.0
|
%
|
|
$
|
97.6
|
|
% of total revenue
|
19.4
|
%
|
|
|
19.0
|
%
|
|
|
19.4
|
%
|
44
|
|
2015 Form 10-K
|
Research and development
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Years ended December 31,
|
|
|
|
|
|
|
|
||||||||
(dollars in millions)
|
2015
|
Change
|
|
2014
|
Change
|
|
2013
|
||||||||
Research and development expense
|
$
|
84.6
|
|
9.6
|
%
|
|
$
|
77.2
|
|
17.7
|
%
|
|
$
|
65.6
|
|
% of total revenue
|
13.3
|
%
|
|
|
13.7
|
%
|
|
|
13.0
|
%
|
2015 Form 10-K
|
|
45
|
General and administrative
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Years ended December 31,
|
|
|
|
|
|
|
|
||||||||
(dollars in millions)
|
2015
|
Change
|
|
2014
|
Change
|
|
2013
|
||||||||
General and administrative expense
|
$
|
76.1
|
|
30.5
|
%
|
|
$
|
58.3
|
|
15.9
|
%
|
|
$
|
50.3
|
|
% of total revenue
|
11.9
|
%
|
|
|
10.3
|
%
|
|
|
10.0
|
%
|
46
|
|
2015 Form 10-K
|
Interest expense
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Years ended December 31,
|
|
|
|
|
|
|
|
||||||||
(dollars in millions)
|
2015
|
Change
|
|
2014
|
Change
|
|
2013
|
||||||||
Interest expense
|
$
|
8.1
|
|
35.0
|
%
|
|
$
|
6.0
|
|
3.4
|
%
|
|
$
|
5.8
|
|
% of total revenue
|
1.3
|
%
|
|
|
1.1
|
%
|
|
|
1.2
|
%
|
(dollars in millions)
|
Timing of recognition
|
|
December 31,
2015 |
|
Change
|
|
|
December 31,
2014 |
|
||
Subscriptions
|
Over the period billed in advance, generally one year
|
|
$
|
122.5
|
|
24.7
|
%
|
|
$
|
98.2
|
|
Maintenance
|
Over the period billed in advance, generally one year
|
|
85.9
|
|
(7.4
|
)%
|
|
92.8
|
|
||
Services
|
As services are delivered
|
|
28.5
|
|
(3.4
|
)%
|
|
29.5
|
|
||
License fees and other
|
Upon delivery of the solution or service
|
|
0.4
|
|
(50.0
|
)%
|
|
0.8
|
|
||
Total deferred revenue
(1)
|
|
|
237.3
|
|
7.2
|
%
|
|
221.3
|
|
||
Less: Long-term portion
|
|
|
7.1
|
|
(21.1
|
)%
|
|
9.0
|
|
||
Current portion
(1)
|
|
|
$
|
230.2
|
|
8.4
|
%
|
|
$
|
212.3
|
|
(1)
|
The individual amounts for each year may not sum to total deferred revenue or current portion of deferred revenue due to rounding.
|
2015 Form 10-K
|
|
47
|
Years ended December 31,
|
|
|
|
|||
|
2015
|
2014
|
2013
|
|||
Effective tax rate
|
30.6
|
%
|
27.9
|
%
|
32.8
|
%
|
48
|
|
2015 Form 10-K
|
Years ended December 31,
|
|
|
|
|
|
|
|
||||||||
(dollars in millions)
|
2015
|
Change
|
|
2014
|
Change
|
|
2013
|
||||||||
GAAP Revenue
|
$
|
637.9
|
|
13.0
|
%
|
|
$
|
564.4
|
|
12.0
|
%
|
|
$
|
503.8
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
||||||||
Add: Acquisition-related deferred revenue write-down
|
9.4
|
|
51.6
|
%
|
|
6.2
|
|
463.6
|
%
|
|
1.1
|
|
|||
Non-GAAP revenue
(1)
|
$
|
647.3
|
|
13.4
|
%
|
|
$
|
570.7
|
|
13.0
|
%
|
|
$
|
504.9
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP gross profit
|
$
|
333.3
|
|
14.5
|
%
|
|
$
|
291.0
|
|
7.3
|
%
|
|
$
|
271.2
|
|
GAAP gross margin
|
52.2
|
%
|
|
|
51.6
|
%
|
|
|
53.8
|
%
|
|||||
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
||||||||
Add: Acquisition-related deferred revenue write-down
|
9.4
|
|
51.6
|
%
|
|
6.2
|
|
463.6
|
%
|
|
1.1
|
|
|||
Add: Stock-based compensation expense
|
3.5
|
|
(2.8
|
)%
|
|
3.6
|
|
(10.0
|
)%
|
|
4.0
|
|
|||
Add: Amortization of intangibles from business combinations
|
30.0
|
|
23.5
|
%
|
|
24.3
|
|
10.0
|
%
|
|
22.1
|
|
|||
Add: Employee severance
|
1.5
|
|
100.0
|
%
|
|
—
|
|
—
|
%
|
|
—
|
|
|||
Add: Acquisition-related integration costs
|
—
|
|
—
|
%
|
|
—
|
|
(100.0
|
)%
|
|
0.8
|
|
|||
Subtotal
(1)
|
44.3
|
|
29.5
|
%
|
|
34.2
|
|
22.1
|
%
|
|
28.0
|
|
|||
Non-GAAP gross profit
(1)
|
$
|
377.7
|
|
16.1
|
%
|
|
$
|
325.2
|
|
8.7
|
%
|
|
$
|
299.1
|
|
Non-GAAP gross margin
|
58.3
|
%
|
|
|
57.0
|
%
|
|
|
59.3
|
%
|
(1)
|
The individual amounts for each year may not sum to non-GAAP revenue, subtotal or non-GAAP gross profit due to rounding.
|
2015 Form 10-K
|
|
49
|
|
|
|
|
|
|
|
|
||||||||
Years ended December 31,
|
|
|
|
|
|
|
|
||||||||
(dollars in millions, except per share amounts)
|
2015
|
Change
|
|
2014
|
Change
|
|
2013
|
||||||||
GAAP income from operations
|
$
|
46.7
|
|
0.6
|
%
|
|
$
|
46.4
|
|
(9.9
|
)%
|
|
$
|
51.5
|
|
GAAP operating margin
|
7.3
|
%
|
|
|
|
8.2
|
%
|
|
|
|
10.2
|
%
|
|||
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
|
|||||||
Add: Acquisition-related deferred revenue write-down
|
9.4
|
|
51.6
|
%
|
|
6.2
|
|
463.6
|
%
|
|
1.1
|
|
|||
Add: Stock-based compensation expense
|
25.2
|
|
45.7
|
%
|
|
17.3
|
|
2.4
|
%
|
|
16.9
|
|
|||
Add: Amortization of intangibles from business combinations
|
32.2
|
|
23.4
|
%
|
|
26.1
|
|
6.1
|
%
|
|
24.6
|
|
|||
Add: Employee severance
|
3.2
|
|
100.0
|
%
|
|
—
|
|
(100.0
|
)%
|
|
0.6
|
|
|||
Add: Impairment of capitalized software development costs
|
0.2
|
|
(87.5
|
)%
|
|
1.6
|
|
100.0
|
%
|
|
—
|
|
|||
Add: Acquisition-related integration costs
|
1.1
|
|
37.5
|
%
|
|
0.8
|
|
(55.6
|
)%
|
|
1.8
|
|
|||
Add: Acquisition-related expenses
|
3.9
|
|
69.6
|
%
|
|
2.3
|
|
100.0
|
%
|
|
—
|
|
|||
Add: CEO transition costs
|
—
|
|
(100.0
|
)%
|
|
0.9
|
|
(30.8
|
)%
|
|
1.3
|
|
|||
Add: Restructuring costs
|
—
|
|
—
|
%
|
|
—
|
|
(100.0
|
)%
|
|
3.5
|
|
|||
Subtotal
(1)
|
75.2
|
|
36.0
|
%
|
|
55.3
|
|
11.3
|
%
|
|
49.7
|
|
|||
Non-GAAP income from operations
(1)
|
$
|
122.0
|
|
20.0
|
%
|
|
$
|
101.7
|
|
0.4
|
%
|
|
$
|
101.3
|
|
Non-GAAP operating margin
|
18.8
|
%
|
|
|
|
17.8
|
%
|
|
|
|
20.1
|
%
|
|||
|
|
|
|
|
|
|
|
||||||||
GAAP net income
|
$
|
25.6
|
|
(9.5
|
)%
|
|
$
|
28.3
|
|
(7.2
|
)%
|
|
$
|
30.5
|
|
Shares used in computing GAAP diluted earnings per share
|
46,498,704
|
|
1.5
|
%
|
|
45,799,874
|
|
0.8
|
%
|
|
45,421,140
|
|
|||
GAAP diluted earnings per share
|
$
|
0.55
|
|
(11.3
|
)%
|
|
$
|
0.62
|
|
(7.5
|
)%
|
|
$
|
0.67
|
|
Non-GAAP adjustments:
|
|
|
|
|
|
|
|
||||||||
Add: Total Non-GAAP adjustments affecting loss from operations
|
75.2
|
|
36.0
|
%
|
|
55.3
|
|
11.3
|
%
|
|
49.7
|
|
|||
Add: Loss on sale of business
|
2.0
|
|
100.0
|
%
|
|
—
|
|
—
|
%
|
|
—
|
|
|||
Add: Loss on debt extinguishment and termination of derivative instruments
|
—
|
|
(100.0
|
)%
|
|
1.0
|
|
100.0
|
%
|
|
—
|
|
|||
Less: Tax impact related to Non-GAAP adjustments
|
(33.2
|
)
|
26.2
|
%
|
|
(26.3
|
)
|
18.5
|
%
|
|
(22.2
|
)
|
|||
Non-GAAP net income
(1)
|
$
|
69.6
|
|
19.4
|
%
|
|
$
|
58.3
|
|
0.5
|
%
|
|
$
|
58.0
|
|
|
|
|
|
|
|
|
|
||||||||
Shares used in computing Non-GAAP diluted earnings per share
|
46,498,704
|
|
1.5
|
%
|
|
45,799,874
|
|
0.8
|
%
|
|
45,421,140
|
|
|||
Non-GAAP diluted earnings per share
|
$
|
1.50
|
|
18.1
|
%
|
|
$
|
1.27
|
|
(0.8
|
)%
|
|
$
|
1.28
|
|
(1)
|
The individual amounts for each year may not sum to subtotal, non-GAAP income from operations or non-GAAP net income due to rounding.
|
50
|
|
2015 Form 10-K
|
2015 Form 10-K
|
|
51
|
Years ended December 31,
|
|
|
|
|
|||||
(dollars in millions)
|
2015
|
Change
|
|
2014
|
|||||
GAAP revenue
|
$
|
637.9
|
|
13.0
|
%
|
|
$
|
564.4
|
|
(Less) Add: Non-GAAP acquisition-related revenue
(1)
|
(0.9
|
)
|
|
|
37.4
|
|
|||
Less: Revenue from divested businesses
(2)
|
—
|
|
|
|
(1.3
|
)
|
|||
Total Non-GAAP adjustments
|
(0.9
|
)
|
|
|
36.2
|
|
|||
Non-GAAP revenue
(3)
|
$
|
637.1
|
|
6.1
|
%
|
|
$
|
600.6
|
|
Foreign currency impact on Non-GAAP revenue
(4)
|
9.6
|
|
|
|
—
|
|
|||
Non-GAAP revenue on constant currency basis
(4)
|
$
|
646.7
|
|
7.7
|
%
|
|
$
|
600.6
|
|
(1)
|
Non-GAAP acquisition-related revenue excludes incremental acquisition-related revenue calculated in accordance with GAAP that is attributable to companies acquired in the current fiscal year. For companies acquired in the immediately preceding fiscal year, non-GAAP acquisition-related revenue reflects presentation of full-year incremental non-GAAP revenue derived from such companies, as if they were combined throughout the prior period, and it includes the current period non-GAAP revenue from the acquisition-related deferred revenue write-down attributable to those companies.
|
(2)
|
For businesses divested in the current fiscal year, non-GAAP organic revenue growth excludes a portion of the prior year period revenue associated with businesses divested of in the current fiscal year. The exclusion of the prior period revenue is to present the results of the divested business with the results of the combined company for the same period of time in both the prior and current periods.
|
(3)
|
Non-GAAP revenue for the prior year periods presented herein will not agree to non-GAAP revenue presented in the respective prior period quarterly financial information solely due to the manner in which non-GAAP organic revenue growth is calculated.
|
(4)
|
To determine non-GAAP organic revenue growth on a constant currency basis, revenues from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable prior period's quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Canadian Dollar, EURO, British Pound and Australian Dollar.
|
52
|
|
2015 Form 10-K
|
Years ended December 31,
|
|
|
|
|
|||||
(dollars in millions)
|
2014
|
Change
|
|
2013
|
|||||
GAAP revenue
|
$
|
564.4
|
|
12.0
|
%
|
|
$
|
503.8
|
|
Less: GAAP acquisition-related revenue
(1)
|
(10.4
|
)
|
|
|
—
|
|
|||
Add: Payments revenue from net-to-gross presentation change
(2)
|
—
|
|
|
|
13.7
|
|
|||
Total Non-GAAP adjustments
|
(10.4
|
)
|
|
|
13.7
|
|
|||
Non-GAAP revenue
|
$
|
554.0
|
|
7.1
|
%
|
|
$
|
517.5
|
|
(1)
|
The calculation excludes incremental acquisition-related revenue calculated in accordance with GAAP that is attributable to companies acquired in the current fiscal year.
|
(2)
|
The calculation reflects gross presentation of revenues associated with certain payment processing services throughout 2013, as if the change in presentation was effective January 2013, instead of effective October 2013 as previously discussed.
|
2015 Form 10-K
|
|
53
|
|
|
|
|
|
|
|
|
||||||||
Years ended December 31,
|
|
|
|
|
|
|
|
||||||||
(dollars in millions)
|
2015
|
Change
|
|
2014
|
Change
|
|
2013
|
||||||||
Net cash provided by operating activities
|
$
|
114.3
|
|
11.7
|
%
|
|
$
|
102.3
|
|
(4.6
|
)%
|
|
$
|
107.2
|
|
Net cash used in investing activities
|
(222.7
|
)
|
5.3
|
%
|
|
(211.4
|
)
|
773.6
|
%
|
|
(24.2
|
)
|
|||
Net cash provided by (used in) financing activities
|
110.4
|
|
(1.4
|
)%
|
|
112.0
|
|
(232.9
|
)%
|
|
(84.3
|
)
|
•
|
an increase in current year bonus payments from a prior year change in the timing of payouts for certain bonus plans, from quarterly to annually, partially offset by an increase in amounts accrued for current year performance against current year targets;
|
•
|
a decrease in the growth rate of deferred revenue which was primarily attributable to the fair value of acquired deferred revenues and billing cycles of acquired companies, partially offset by
|
•
|
fluctuations in the timing of vendor payments; and
|
•
|
a reduction in cash taxes paid.
|
54
|
|
2015 Form 10-K
|
•
|
a change in the timing of payouts for certain bonus plans, from quarterly to annually;
|
•
|
an increase in deferred revenue from growth in subscriptions;
|
•
|
increases in accrued commissions and salaries; and
|
•
|
fluctuations in the timing of vendor payments; which were partially offset by
|
•
|
an increase in prepaid taxes; and
|
•
|
increases in accounts receivable from growth in subscriptions.
|
2015 Form 10-K
|
|
55
|
Financial Covenant
|
Requirement
|
Ratio as of December 31, 2015
|
Net Leverage Ratio
|
≤ 3.50 to 1.00
|
2.76 to 1.00
|
Interest Coverage Ratio
|
≥ 2.50 to 1.00
|
17.11 to 1.00
|
56
|
|
2015 Form 10-K
|
|
Payments due by period
|
||||||||||||||
(dollars in millions)
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
|
|||||
Recorded contractual obligations:
|
|
|
|
|
|
||||||||||
Debt
(1)
|
$
|
410.2
|
|
$
|
4.4
|
|
$
|
8.7
|
|
$
|
397.1
|
|
$
|
—
|
|
Interest payments on debt
(2)
|
0.7
|
|
0.7
|
|
—
|
|
—
|
|
—
|
|
|||||
|
|
|
|
|
|
||||||||||
Unrecorded contractual obligations:
|
|
|
|
|
|
||||||||||
Operating leases
(3)
|
97.3
|
|
14.6
|
|
26.1
|
|
24.3
|
|
32.3
|
|
|||||
Interest payments on debt
(4)
|
27.7
|
|
8.8
|
|
17.6
|
|
1.3
|
|
—
|
|
|||||
Purchase obligations
(5)
|
19.0
|
|
7.8
|
|
9.1
|
|
2.1
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
554.9
|
|
$
|
36.3
|
|
$
|
61.5
|
|
$
|
424.8
|
|
$
|
32.3
|
|
(1)
|
Represents principal payments only, under the following assumptions: (i) that the amounts outstanding under the 2014 Credit Facility at
December 31, 2015
will remain outstanding until maturity, with minimum payments occurring as currently scheduled, and (ii) that there are no assumed future borrowings on the 2014 Credit Facility for the purposes of determining minimum commitment amounts.
|
(2)
|
Represents interest payment obligations related to our interest rate swap agreements.
|
(3)
|
Our commitments related to operating leases have not been reduced by incentive payments and reimbursement of leasehold improvements.
|
(4)
|
The actual interest expense recognized in our consolidated statements of comprehensive income will depend on the amount of debt, the length of time the debt is outstanding and the interest rate, which could be different from our assumptions described in (1) above.
|
(5)
|
We utilize third-party technology in conjunction with our solutions and services, with contractual arrangements varying in length from
one
to
five
years. In certain cases, these arrangements require a minimum annual purchase commitment by us.
|
2015 Form 10-K
|
|
57
|
58
|
|
2015 Form 10-K
|
Revenue Recognition
|
|
|
|
|
|
Description
|
Judgments and Uncertainties
|
Effect if Actual Results Differ
From Assumptions
|
|
|
|
See Note 2 to our consolidated financial statements in this report for a complete discussion of our revenue recognition policies.
We recognize revenue when all of the following conditions are met:
(1) Persuasive evidence of an arrangement exists;
(2) The solutions or services have been delivered;
(3) The fee is fixed or determinable; and
(4) Collection of the resulting receivable is probable.
To the extent that our customers are billed for our solutions and services in advance of meeting each of the conditions above, we record such amounts in deferred revenue.
|
Our revenue recognition accounting methodology contains uncertainties because it requires management to make significant estimates and assumptions, and to apply judgment.
For example, for arrangements that have multiple elements and include software licenses, we must exercise judgment and use estimates in order to (1) allocate the total price among the various elements we must deliver; (2) determine whether undelivered services are essential to the functionality of the delivered solutions and services; (3) determine whether vendor specific objective evidence ("VSOE") of fair value exists for each undelivered element; and (4) determine whether and when each element has been delivered.
For arrangements that have multiple elements and do not include software licenses, we must exercise judgment and use estimates in order to (1) determine whether and when each element has been delivered; (2) determine the fair value of each element using the selling price hierarchy of VSOE of fair value if available, third-party evidence ("TPE") if VSOE is not available, and best estimate of selling price ("BESP") if neither VSOE nor TPE is available; and (3) allocate the total price among the various elements based on the relative selling price method.
In addition, we exercise judgment in certain transactions when determining whether we should recognize revenue based on the gross amount billed to a customer (as a principle) or the net amount retained (as an agent). These judgments are based on the predominant weighting of factors identified in accounting guidance.
|
If we were to change any of these judgments or estimates, it could cause a material increase or decrease in the amount of revenue or deferred revenue that we report in a particular period.
|
2015 Form 10-K
|
|
59
|
60
|
|
2015 Form 10-K
|
2015 Form 10-K
|
|
61
|
|
Page No.
|
|
|
|
|
|
|
|
|
|
|
|
|
62
|
|
2015 Form 10-K
|
2015 Form 10-K
|
|
63
|
(in thousands, except share amounts)
|
December 31,
2015 |
|
December 31,
2014 |
|
||
Assets
|
|
|
||||
Current assets:
|
|
|
||||
Cash and cash equivalents
|
$
|
15,362
|
|
$
|
14,735
|
|
Restricted cash due to customers
|
255,038
|
|
140,709
|
|
||
Accounts receivable, net of allowance of $4,943 and $4,539 at December 31, 2015 and December 31, 2014, respectively
|
80,046
|
|
77,523
|
|
||
Prepaid expenses and other current assets
|
48,666
|
|
40,392
|
|
||
Deferred tax asset, current portion
|
—
|
|
14,423
|
|
||
Total current assets
|
399,112
|
|
287,782
|
|
||
Property and equipment, net
|
52,651
|
|
49,896
|
|
||
Software development costs, net
|
19,551
|
|
9,420
|
|
||
Goodwill
|
436,449
|
|
349,008
|
|
||
Intangible assets, net
|
294,672
|
|
229,307
|
|
||
Other assets
|
21,418
|
|
17,770
|
|
||
Total assets
|
$
|
1,223,853
|
|
$
|
943,183
|
|
Liabilities and stockholders’ equity
|
|
|
||||
Current liabilities:
|
|
|
||||
Trade accounts payable
|
$
|
19,208
|
|
$
|
11,436
|
|
Accrued expenses and other current liabilities
|
57,461
|
|
52,201
|
|
||
Due to customers
|
255,038
|
|
140,709
|
|
||
Debt, current portion
|
4,375
|
|
4,375
|
|
||
Deferred revenue, current portion
|
230,216
|
|
212,283
|
|
||
Total current liabilities
|
566,298
|
|
421,004
|
|
||
Debt, net of current portion
|
404,229
|
|
276,196
|
|
||
Deferred tax liability
|
27,996
|
|
43,639
|
|
||
Deferred revenue, net of current portion
|
7,119
|
|
8,991
|
|
||
Other liabilities
|
7,623
|
|
7,437
|
|
||
Total liabilities
|
1,013,265
|
|
757,267
|
|
||
Commitments and contingencies (see Note 11)
|
|
|
||||
Stockholders’ equity:
|
|
|
||||
Preferred stock; 20,000,000 shares authorized, none outstanding
|
—
|
|
—
|
|
||
Common stock, $0.001 par value; 180,000,000 shares authorized, 56,873,817 and 56,048,135 shares issued at December 31, 2015 and December 31, 2014, respectively
|
57
|
|
56
|
|
||
Additional paid-in capital
|
276,340
|
|
245,674
|
|
||
Treasury stock, at cost; 9,903,071 and 9,740,054 shares at December 31, 2015 and December 31, 2014, respectively
|
(199,861
|
)
|
(190,440
|
)
|
||
Accumulated other comprehensive loss
|
(825
|
)
|
(1,032
|
)
|
||
Retained earnings
|
134,877
|
|
131,658
|
|
||
Total stockholders’ equity
|
210,588
|
|
185,916
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,223,853
|
|
$
|
943,183
|
|
|
|
|
||||
The accompanying notes are an integral part of these consolidated financial statements.
|
64
|
|
2015 Form 10-K
|
2015 Form 10-K
|
|
65
|
|
Years ended December 31,
|
|
|||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
|
|||
Cash flows from operating activities
|
|
|
|
||||||
Net income
|
$
|
25,649
|
|
$
|
28,290
|
|
$
|
30,472
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||||
Depreciation and amortization
|
55,997
|
|
45,417
|
|
43,164
|
|
|||
Provision for doubtful accounts and sales returns
|
6,825
|
|
5,248
|
|
5,403
|
|
|||
Stock-based compensation expense
|
25,246
|
|
17,345
|
|
16,910
|
|
|||
Excess tax benefits from exercise and vesting of stock-based compensation
|
(5,466
|
)
|
(7,455
|
)
|
—
|
|
|||
Deferred taxes
|
3,165
|
|
3,050
|
|
13,873
|
|
|||
Loss on sale of business
|
1,976
|
|
—
|
|
—
|
|
|||
Impairment of capitalized software development costs
|
239
|
|
1,626
|
|
—
|
|
|||
Loss on debt extinguishment and termination of derivative instruments
|
—
|
|
996
|
|
—
|
|
|||
Amortization of deferred financing costs and discount
|
899
|
|
734
|
|
613
|
|
|||
Other non-cash adjustments
|
(197
|
)
|
1,163
|
|
1,261
|
|
|||
Changes in operating assets and liabilities, net of acquisition and disposal of businesses:
|
|
|
|
||||||
Accounts receivable
|
(7,593
|
)
|
(5,750
|
)
|
3,161
|
|
|||
Prepaid expenses and other assets
|
(10,979
|
)
|
(8,464
|
)
|
2,977
|
|
|||
Trade accounts payable
|
6,133
|
|
(948
|
)
|
(218
|
)
|
|||
Accrued expenses and other liabilities
|
(166
|
)
|
4,014
|
|
(17,055
|
)
|
|||
Restricted cash due to customers
|
(34,279
|
)
|
(33,510
|
)
|
(39,801
|
)
|
|||
Due to customers
|
34,279
|
|
33,510
|
|
39,801
|
|
|||
Deferred revenue
|
12,612
|
|
17,011
|
|
6,683
|
|
|||
Net cash provided by operating activities
|
114,340
|
|
102,277
|
|
107,244
|
|
|||
Cash flows from investing activities
|
|
|
|
||||||
Purchase of property and equipment
|
(18,633
|
)
|
(13,911
|
)
|
(20,086
|
)
|
|||
Capitalized software development costs
|
(15,481
|
)
|
(8,535
|
)
|
(3,197
|
)
|
|||
Purchase of net assets of acquired companies, net of cash acquired
|
(188,072
|
)
|
(188,918
|
)
|
(876
|
)
|
|||
Net cash used in sale of business
|
(521
|
)
|
—
|
|
—
|
|
|||
Net cash used in investing activities
|
(222,707
|
)
|
(211,364
|
)
|
(24,159
|
)
|
|||
Cash flows from financing activities
|
|
|
|
||||||
Proceeds from issuance of debt
|
312,300
|
|
365,100
|
|
103,008
|
|
|||
Payments on debt
|
(184,475
|
)
|
(235,589
|
)
|
(165,600
|
)
|
|||
Debt issuance costs
|
(429
|
)
|
(3,003
|
)
|
—
|
|
|||
Proceeds from exercise of stock options
|
32
|
|
188
|
|
385
|
|
|||
Excess tax benefits from exercise and vesting of stock-based compensation
|
5,466
|
|
7,455
|
|
—
|
|
|||
Dividend payments to stockholders
|
(22,508
|
)
|
(22,107
|
)
|
(22,081
|
)
|
|||
Net cash provided by (used in) financing activities
|
110,386
|
|
112,044
|
|
(84,288
|
)
|
|||
Effect of exchange rate on cash and cash equivalents
|
(1,392
|
)
|
(111
|
)
|
(399
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
627
|
|
2,846
|
|
(1,602
|
)
|
|||
Cash and cash equivalents, beginning of year
|
14,735
|
|
11,889
|
|
13,491
|
|
|||
Cash and cash equivalents, end of year
|
$
|
15,362
|
|
$
|
14,735
|
|
$
|
11,889
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information
|
|
|
|
||||||
Cash (paid) received during the year for:
|
|
|
|
||||||
Interest
|
(7,208
|
)
|
(4,894
|
)
|
(5,108
|
)
|
|||
Taxes, net of refunds
|
(4,795
|
)
|
(9,581
|
)
|
4,132
|
|
|||
Purchase of equipment and other assets included in accounts payable
|
(3,204
|
)
|
(3,300
|
)
|
(1,557
|
)
|
|||
|
|
|
|
||||||
The accompanying notes are an integral part of these consolidated financial statements.
|
66
|
|
2015 Form 10-K
|
67
|
|
2015 Form 10-K
|
68
|
|
2015 Form 10-K
|
2015 Form 10-K
|
|
69
|
70
|
|
2015 Form 10-K
|
•
|
Level 1 - Quoted prices for identical assets or liabilities in active markets;
|
•
|
Level 2 - Quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and
|
•
|
Level 3 - Valuations derived from valuation techniques in which one or more significant inputs are unobservable.
|
2015 Form 10-K
|
|
71
|
72
|
|
2015 Form 10-K
|
|
Basis of amortization
|
Amortization
period
(in years)
|
Customer relationships
|
Straight-line and accelerated
(1)
|
4-17
|
Marketing assets
|
Straight-line
|
1-8
|
Acquired software and technology
|
Straight-line and accelerated
(2)
|
4-10
|
Non-compete agreements
|
Straight-line
|
2-5
|
Database
|
Straight-line
|
8
|
(1)
|
Certain of the customer relationships are amortized on an accelerated basis.
|
(2)
|
Certain of the acquired software and technology assets are amortized on an accelerated basis.
|
2015 Form 10-K
|
|
73
|
74
|
|
2015 Form 10-K
|
2015 Form 10-K
|
|
75
|
Years ended December 31,
(in thousands)
|
Balance at beginning of year
|
|
Provision/adjustment
|
|
Write-off
|
|
Balance at
end of year
|
|
||||
2015
|
$
|
4,185
|
|
$
|
5,834
|
|
$
|
(5,588
|
)
|
$
|
4,431
|
|
2014
|
5,158
|
|
4,407
|
|
(5,380
|
)
|
4,185
|
|
||||
2013
|
7,730
|
|
4,132
|
|
(6,704
|
)
|
5,158
|
|
Years ended December 31,
(in thousands)
|
Balance at beginning of year
|
|
Provision/adjustment
|
|
Write-off
|
|
Balance at
end of year
|
|
||||
2015
|
$
|
354
|
|
$
|
699
|
|
$
|
(541
|
)
|
$
|
512
|
|
2014
|
455
|
|
777
|
|
(878
|
)
|
354
|
|
||||
2013
|
816
|
|
775
|
|
(1,136
|
)
|
455
|
|
Years ended December 31,
(in thousands)
|
Balance at beginning of year
|
|
Additions
|
|
Expense
|
|
Balance at
end of year
|
|
||||
2015
|
$
|
22,630
|
|
$
|
55,934
|
|
$
|
(48,423
|
)
|
$
|
30,141
|
|
2014
|
20,088
|
|
24,615
|
|
(22,073
|
)
|
22,630
|
|
||||
2013
|
18,142
|
|
20,487
|
|
(18,541
|
)
|
20,088
|
|
76
|
|
2015 Form 10-K
|
2015 Form 10-K
|
|
77
|
78
|
|
2015 Form 10-K
|
|
Intangible assets acquired
|
|
Weighted average amortization period
|
|
Smart Tuition
|
(in thousands)
|
|
(in years)
|
|
Customer relationships
|
$
|
72,300
|
|
17
|
Marketing assets
|
1,200
|
|
3
|
|
Acquired technology
|
22,100
|
|
7
|
|
Non-compete agreements
|
2,200
|
|
5
|
|
Total intangible assets
|
$
|
97,800
|
|
14
|
2015 Form 10-K
|
|
79
|
|
Years ended December 31,
|
|
||||
(in thousands, except per share amounts)
|
2015
|
|
2014
|
|
||
Revenue
|
$
|
666,131
|
|
$
|
587,459
|
|
Net income
|
$
|
26,334
|
|
$
|
17,952
|
|
Basic earnings per share
|
$
|
0.58
|
|
$
|
0.40
|
|
Diluted earnings per share
|
$
|
0.57
|
|
$
|
0.39
|
|
80
|
|
2015 Form 10-K
|
|
Intangible assets acquired
|
|
Weighted average amortization period
|
|
MicroEdge
|
(in thousands)
|
|
(in years)
|
|
Customer relationships
|
$
|
61,200
|
|
13
|
Marketing assets
|
2,500
|
|
7
|
|
Marketing assets
|
1,600
|
|
Indefinite
|
|
Acquired technology
|
24,300
|
|
7
|
|
Non-compete agreements
|
600
|
|
3
|
|
Total intangible assets
|
$
|
90,200
|
|
11
|
|
Years ended December 31,
|
|
||||
(in thousands, except per share amounts)
|
2014
|
|
2013
|
|
||
Revenue
|
$
|
592,930
|
|
$
|
528,095
|
|
Net income
|
$
|
26,944
|
|
$
|
25,300
|
|
Basic earnings per share
|
$
|
0.60
|
|
$
|
0.57
|
|
Diluted earnings per share
|
$
|
0.59
|
|
$
|
0.56
|
|
2015 Form 10-K
|
|
81
|
|
Intangible assets acquired
|
|
Weighted average amortization period
|
|
WhippleHill
|
(in thousands)
|
|
(in years)
|
|
Customer relationships
|
$
|
11,300
|
|
11
|
Acquired technology
|
8,500
|
|
7
|
|
Marketing assets
|
2,300
|
|
9
|
|
Non-compete agreements
|
100
|
|
3
|
|
Total intangible assets
|
$
|
22,200
|
|
9
|
82
|
|
2015 Form 10-K
|
|
Years ended December 31,
|
|
|||||||
(in thousands, except share and per share amounts)
|
2015
|
|
2014
|
|
2013
|
|
|||
Numerator:
|
|
|
|
||||||
Net income
|
$
|
25,649
|
|
$
|
28,290
|
|
$
|
30,472
|
|
Denominator:
|
|
|
|
||||||
Weighted average common shares
|
45,623,854
|
|
45,215,138
|
|
44,684,812
|
|
|||
Add effect of dilutive securities:
|
|
|
|
||||||
Stock-based compensation
|
874,850
|
|
584,736
|
|
736,328
|
|
|||
Weighted average common shares assuming dilution
|
46,498,704
|
|
45,799,874
|
|
45,421,140
|
|
|||
Earnings per share:
|
|
|
|
||||||
Basic
|
$
|
0.56
|
|
$
|
0.63
|
|
$
|
0.68
|
|
Diluted
|
$
|
0.55
|
|
$
|
0.62
|
|
$
|
0.67
|
|
|
Years ended December 31,
|
|
||||
|
2015
|
|
2014
|
|
2013
|
|
Shares excluded from calculations of diluted earnings per share
|
18,554
|
|
23,159
|
|
116,438
|
|
2015 Form 10-K
|
|
83
|
|
Fair value measurement using
|
|
|
||||||||||||
(in thousands)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||
Fair value as of December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
(1)
|
$
|
—
|
|
|
$
|
406
|
|
|
$
|
—
|
|
|
$
|
406
|
|
Total financial assets
|
$
|
—
|
|
|
$
|
406
|
|
|
$
|
—
|
|
|
$
|
406
|
|
|
|
|
|
|
|
|
|
||||||||
Fair value as of December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
(1)
|
$
|
—
|
|
|
$
|
438
|
|
|
$
|
—
|
|
|
$
|
438
|
|
Total financial liabilities
|
$
|
—
|
|
|
$
|
438
|
|
|
$
|
—
|
|
|
$
|
438
|
|
|
|
|
|
|
|
|
|
||||||||
Fair value as of December 31, 2014
|
|
|
|
|
|
|
|
||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
(1)
|
$
|
—
|
|
|
$
|
268
|
|
|
$
|
—
|
|
|
$
|
268
|
|
Total financial liabilities
|
$
|
—
|
|
|
$
|
268
|
|
|
$
|
—
|
|
|
$
|
268
|
|
(1)
|
The fair value of our interest rate swaps was based on model-driven valuations using LIBOR rates, which are observable at commonly quoted intervals. Accordingly, our interest rate swaps are classified within Level 2 of the fair value hierarchy.
|
84
|
|
2015 Form 10-K
|
|
Estimated
useful life
(years)
|
December 31,
|
|
||||
(in thousands)
|
2015
|
|
2014
|
|
|||
Equipment
|
3 - 5
|
$
|
3,868
|
|
$
|
3,680
|
|
Computer hardware
|
3 - 5
|
77,668
|
|
67,145
|
|
||
Computer software
(1)
|
3 - 5
|
26,457
|
|
23,550
|
|
||
Construction in progress
|
-
|
2,337
|
|
587
|
|
||
Furniture and fixtures
|
5 - 7
|
7,146
|
|
7,182
|
|
||
Leasehold improvements
|
Term of lease
|
17,171
|
|
14,528
|
|
||
Total property and equipment
(1)
|
|
134,647
|
|
116,672
|
|
||
Less: accumulated depreciation
(1)
|
|
(81,996
|
)
|
(66,776
|
)
|
||
Property and equipment, net
(1)
|
|
$
|
52,651
|
|
$
|
49,896
|
|
(1)
|
In order to provide comparability between periods presented, certain capitalized software development costs and related accumulated amortization that were recorded in "property and equipment, net" have been recorded to "software development costs, net" in the previously reported consolidated balance sheet to conform to presentation of the current period.
|
|
Estimated
useful life
(years)
|
December 31,
|
|
||||
(in thousands)
|
2015
|
|
2014
|
|
|||
Software development costs
|
3
|
$
|
28,767
|
|
$
|
13,259
|
|
Less: accumulated amortization
|
|
(9,216
|
)
|
(3,839
|
)
|
||
Software development costs, net
|
|
$
|
19,551
|
|
$
|
9,420
|
|
2015 Form 10-K
|
|
85
|
(in thousands)
|
ECBU
|
GMBU
|
IBU
|
Total
|
||||||||
Balance at December 31, 2014
|
$
|
242,075
|
|
$
|
100,418
|
|
$
|
6,515
|
|
$
|
349,008
|
|
Additions related to business combinations
(1)
|
—
|
|
90,558
|
|
239
|
|
90,797
|
|
||||
Adjustments related to prior year business combinations
(2)
|
(1,581
|
)
|
—
|
|
—
|
|
(1,581
|
)
|
||||
Adjustments related to dispositions
(3)
|
—
|
|
—
|
|
(1,153
|
)
|
(1,153
|
)
|
||||
Effect of foreign currency translation
(4)
|
—
|
|
—
|
|
(622
|
)
|
(622
|
)
|
||||
Balance at December 31, 2015
|
$
|
240,494
|
|
$
|
190,976
|
|
$
|
4,979
|
|
$
|
436,449
|
|
(1)
|
The goodwill allocated to GMBU was associated with our acquisition of Smart Tuition in October 2015 while the goodwill allocated to IBU was associated with an insignificant business combination.
|
(2)
|
See
Note 3
to these consolidated financial statements for details of the immaterial measurement period adjustment.
|
(3)
|
See
Note 18
to these consolidated financial statements for a summary of the disposition.
|
(4)
|
Includes an insignificant reduction in goodwill related to the disposition discussed in (3) above.
|
86
|
|
2015 Form 10-K
|
|
December 31,
|
|
||||
(in thousands)
|
2015
|
|
2014
|
|
||
Finite-lived gross carrying amount
|
|
|
||||
Customer relationships
|
$
|
247,462
|
|
$
|
174,239
|
|
Marketing assets
|
16,187
|
|
15,158
|
|
||
Acquired software and technology
|
148,615
|
|
126,650
|
|
||
Non-compete agreements
|
3,402
|
|
1,158
|
|
||
Database
|
4,378
|
|
4,275
|
|
||
Total finite-lived gross carrying amount
|
420,044
|
|
321,480
|
|
||
Accumulated amortization
|
|
|
||||
Customer relationships
|
(57,748
|
)
|
(43,671
|
)
|
||
Marketing assets
|
(7,753
|
)
|
(6,137
|
)
|
||
Acquired software and technology
|
(57,548
|
)
|
(40,801
|
)
|
||
Non-compete agreements
|
(864
|
)
|
(389
|
)
|
||
Database
|
(4,061
|
)
|
(3,867
|
)
|
||
Total accumulated amortization
|
(127,974
|
)
|
(94,865
|
)
|
||
Indefinite-lived gross carrying amount
|
|
|
||||
Marketing assets
|
2,602
|
|
2,692
|
|
||
Intangible assets, net
|
$
|
294,672
|
|
$
|
229,307
|
|
|
Years ended December 31,
|
|
|||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
|
|||
Included in cost of revenue:
|
|
|
|
||||||
Cost of subscriptions
|
$
|
23,075
|
|
$
|
20,239
|
|
$
|
18,578
|
|
Cost of maintenance
|
4,162
|
|
772
|
|
457
|
|
|||
Cost of services
|
2,382
|
|
2,910
|
|
2,528
|
|
|||
Cost of license fees and other
|
368
|
|
424
|
|
496
|
|
|||
Total included in cost of revenue
|
29,987
|
|
24,345
|
|
22,059
|
|
|||
Included in operating expenses
|
2,231
|
|
1,803
|
|
2,539
|
|
|||
Total amortization of intangibles from business combinations
|
$
|
32,218
|
|
$
|
26,148
|
|
$
|
24,598
|
|
2015 Form 10-K
|
|
87
|
Year ending December 31,
|
Amortization
|
|
|
(in thousands)
|
expense
|
|
|
2016
|
$
|
42,154
|
|
2017
|
41,322
|
|
|
2018
|
39,684
|
|
|
2019
|
36,478
|
|
|
2020
|
27,699
|
|
|
Total
|
$
|
187,337
|
|
(in thousands)
|
December 31,
2015 |
|
December 31,
2014 |
|
||
Deferred sales commissions
|
$
|
30,141
|
|
$
|
22,630
|
|
Prepaid software maintenance
|
15,308
|
|
9,480
|
|
||
Taxes, prepaid and receivable
|
9,121
|
|
8,991
|
|
||
Deferred professional services costs
|
3,603
|
|
5,753
|
|
||
Deferred tax asset
|
2,869
|
|
1,761
|
|
||
Prepaid royalties
|
1,767
|
|
3,192
|
|
||
Other assets
|
7,275
|
|
6,355
|
|
||
Total prepaid expenses and other assets
|
70,084
|
|
58,162
|
|
||
Less: Long-term portion
|
21,418
|
|
17,770
|
|
||
Prepaid expenses and other current assets
|
$
|
48,666
|
|
$
|
40,392
|
|
(in thousands)
|
December 31,
2015 |
|
December 31,
2014 |
|
||
Accrued bonuses
|
$
|
24,591
|
|
$
|
19,480
|
|
Accrued commissions and salaries
|
8,391
|
|
8,712
|
|
||
Taxes payable
|
3,923
|
|
4,285
|
|
||
Deferred rent liabilities
|
4,070
|
|
4,200
|
|
||
Lease incentive obligations
|
4,734
|
|
4,099
|
|
||
Unrecognized tax benefit
|
3,147
|
|
3,791
|
|
||
Customer credit balances
|
3,515
|
|
2,573
|
|
||
Accrued vacation costs
|
2,446
|
|
1,847
|
|
||
Accrued health care costs
|
2,356
|
|
2,707
|
|
||
Other liabilities
|
7,911
|
|
7,944
|
|
||
Total accrued expenses and other liabilities
|
65,084
|
|
59,638
|
|
||
Less: Long-term portion
|
7,623
|
|
7,437
|
|
||
Accrued expenses and other current liabilities
|
$
|
57,461
|
|
$
|
52,201
|
|
88
|
|
2015 Form 10-K
|
(in thousands)
|
December 31,
2015 |
|
December 31,
2014 |
|
||
Subscriptions
|
$
|
122,524
|
|
$
|
98,225
|
|
Maintenance
|
85,901
|
|
92,823
|
|
||
Services
|
28,517
|
|
29,457
|
|
||
License fees and other
|
393
|
|
769
|
|
||
Total deferred revenue
|
237,335
|
|
221,274
|
|
||
Less: Long-term portion
|
7,119
|
|
8,991
|
|
||
Deferred revenue, current portion
|
$
|
230,216
|
|
$
|
212,283
|
|
(in thousands)
|
Years ended December 31,
|
|
||||
2015
|
|
2014
|
|
2013
|
|
|
Interest income
|
155
|
|
59
|
|
67
|
|
Loss on sale of business
|
(1,976
|
)
|
—
|
|
—
|
|
Loss on debt extinguishment and termination of derivative instruments
(1)
|
—
|
|
(996
|
)
|
—
|
|
Other income (expense), net
|
134
|
|
(182
|
)
|
(462
|
)
|
Other expense, net
|
(1,687
|
)
|
(1,119
|
)
|
(395
|
)
|
(1)
|
See
Notes 9 and 10
to these consolidated financial statements for details of the loss on debt extinguishment and termination of derivative instruments.
|
|
Debt balance at
|
|
|
Weighted average effective interest rate at
|
|
||||||
(in thousands, except percentages)
|
December 31,
2015 |
|
December 31,
2014 |
|
|
December 31,
2015 |
|
December 31,
2014 |
|
||
Credit facility:
|
|
|
|
|
|
||||||
Revolving credit loans
|
$
|
242,900
|
|
$
|
110,700
|
|
|
2.15
|
%
|
1.56
|
%
|
Term loans
|
167,344
|
|
171,719
|
|
|
2.51
|
%
|
2.03
|
%
|
||
Total debt
|
410,244
|
|
282,419
|
|
|
2.30
|
%
|
1.85
|
%
|
||
Less: Unamortized debt discount
|
1,640
|
|
1,848
|
|
|
|
|
||||
Less: Debt, current portion
|
4,375
|
|
4,375
|
|
|
2.11
|
%
|
1.39
|
%
|
||
Debt, net of current portion
|
$
|
404,229
|
|
$
|
276,196
|
|
|
2.30
|
%
|
1.85
|
%
|
2015 Form 10-K
|
|
89
|
90
|
|
2015 Form 10-K
|
Year ending December 31,
(in thousands)
|
Annual maturities
|
|
|
2016
|
$
|
4,375
|
|
2017
|
4,375
|
|
|
2018
|
4,375
|
|
|
2019
|
397,119
|
|
|
2020
|
—
|
|
|
Thereafter
|
—
|
|
|
Total required maturities
|
$
|
410,244
|
|
2015 Form 10-K
|
|
91
|
(in thousands)
|
Balance sheet location
|
December 31,
2015 |
|
December 31,
2014 |
|
||
Derivative instruments designated as hedging instruments:
|
|
|
|
||||
Interest rate swap, long-term portion
|
Other assets
|
406
|
|
—
|
|
||
Total derivative instruments designated as hedging instruments
|
|
$
|
406
|
|
$
|
—
|
|
|
|
|
|
||||
|
|
December 31,
2015 |
|
December 31,
2014 |
|
||
Derivative instruments designated as hedging instruments:
|
|
|
|
||||
Interest rate swaps, current portion
|
Accrued expenses and
other current liabilities |
$
|
2
|
|
$
|
—
|
|
Interest rate swaps, long-term portion
|
Other liabilities
|
436
|
|
268
|
|
||
Total derivative instruments designated as hedging instruments
|
|
$
|
438
|
|
$
|
268
|
|
|
Gain (loss) recognized
in accumulated other
comprehensive
loss as of
|
|
Location
of gain (loss)
reclassified from
accumulated other
comprehensive
loss into income
|
Gain (loss) reclassified from accumulated
other comprehensive loss into income
|
|
||
|
December 31,
2015 |
|
Year ended
December 31, |
|
|||
(in thousands)
|
2015
|
|
|||||
Interest rate swaps
|
$
|
(31
|
)
|
Interest expense
|
$
|
(1,569
|
)
|
|
|
|
|
||||
|
December 31,
2014 |
|
|
Year ended
December 31, |
|
||
|
|
2014
|
|
||||
Interest rate swaps
|
$
|
(268
|
)
|
Interest expense
|
$
|
(1,215
|
)
|
Interest rate swaps
|
—
|
|
Loss on debt extinguishment
and termination of derivative instruments
|
(587
|
)
|
||
Total
|
$
|
(268
|
)
|
|
$
|
(1,802
|
)
|
|
|
|
|
||||
|
December 31,
2013 |
|
|
Year ended
December 31, |
|
||
|
|
2013
|
|
||||
Interest rate swaps
|
$
|
(427
|
)
|
Interest expense
|
$
|
(794
|
)
|
92
|
|
2015 Form 10-K
|
Year ending December 31,
|
Operating
|
|
|
(in thousands)
|
leases
|
|
|
2016
|
$
|
13,183
|
|
2017
|
11,711
|
|
|
2018
|
11,465
|
|
|
2019
|
11,882
|
|
|
2020
|
11,162
|
|
|
Thereafter
|
30,886
|
|
|
Total minimum lease payments
|
$
|
90,289
|
|
2015 Form 10-K
|
|
93
|
|
Years ended December 31,
|
|
|||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
|
|||
Current taxes:
|
|
|
|
||||||
U.S. Federal
|
$
|
5,890
|
|
$
|
5,757
|
|
$
|
78
|
|
U.S. State and local
|
2,215
|
|
2,158
|
|
1,127
|
|
|||
International
|
33
|
|
(21
|
)
|
(221
|
)
|
|||
Total current taxes
|
8,138
|
|
7,894
|
|
984
|
|
|||
Deferred taxes:
|
|
|
|
||||||
U.S. Federal
|
2,702
|
|
4,725
|
|
14,394
|
|
|||
U.S. State and local
|
585
|
|
(1,329
|
)
|
(694
|
)
|
|||
International
|
(122
|
)
|
(346
|
)
|
173
|
|
|||
Total deferred taxes
|
3,165
|
|
3,050
|
|
13,873
|
|
|||
Total income tax provision
|
$
|
11,303
|
|
$
|
10,944
|
|
$
|
14,857
|
|
94
|
|
2015 Form 10-K
|
|
Years ended December 31,
|
|
|||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
|
|||
U.S.
|
$
|
37,523
|
|
$
|
39,638
|
|
$
|
48,137
|
|
International
|
(571
|
)
|
(404
|
)
|
(2,808
|
)
|
|||
Income before provision for income taxes
|
$
|
36,952
|
|
$
|
39,234
|
|
$
|
45,329
|
|
|
Years ended December 31,
|
|
||||
|
2015
|
|
2014
|
|
2013
|
|
Federal statutory rate
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
Effect of:
|
|
|
|
|||
State income taxes, net of federal benefit
|
5.7
|
|
3.2
|
|
5.2
|
|
Change in state income tax rate applied to deferred tax balances
|
2.1
|
|
(1.1
|
)
|
(2.5
|
)
|
Fixed assets
|
(0.1
|
)
|
(0.3
|
)
|
(1.0
|
)
|
Unrecognized tax benefit
|
(1.1
|
)
|
(2.9
|
)
|
0.3
|
|
State credits, net of federal benefit
|
6.0
|
|
(1.0
|
)
|
(2.9
|
)
|
Change in valuation reserve
|
(8.6
|
)
|
1.3
|
|
0.7
|
|
Federal credits generated
|
(6.1
|
)
|
(4.7
|
)
|
(5.1
|
)
|
Foreign tax rate
|
(0.7
|
)
|
(0.1
|
)
|
0.6
|
|
Acquisition costs
|
0.1
|
|
0.6
|
|
—
|
|
Section 162(m) limitation
|
0.1
|
|
0.4
|
|
1.8
|
|
Loss from sale of foreign subsidiary
|
1.9
|
|
—
|
|
—
|
|
Domestic production activities deduction
|
(1.8
|
)
|
(1.2
|
)
|
—
|
|
Other
|
(1.9
|
)
|
(1.3
|
)
|
0.7
|
|
Income tax provision effective rate
|
30.6
|
%
|
27.9
|
%
|
32.8
|
%
|
2015 Form 10-K
|
|
95
|
|
December 31,
|
|
||||
(in thousands)
|
2015
|
|
2014
|
|
||
Deferred tax assets relating to:
|
|
|
||||
Federal and state and foreign net operating loss carryforwards
|
$
|
13,913
|
|
$
|
15,428
|
|
Federal, state and foreign tax credits
|
10,464
|
|
14,792
|
|
||
Intangible assets
|
449
|
|
562
|
|
||
Stock-based compensation
|
7,848
|
|
4,072
|
|
||
Accrued bonuses
|
9,335
|
|
7,177
|
|
||
Deferred revenue
|
6,049
|
|
7,332
|
|
||
Allowance for doubtful accounts
|
780
|
|
1,655
|
|
||
Other
|
6,593
|
|
5,790
|
|
||
Total deferred tax assets
|
55,431
|
|
56,808
|
|
||
Deferred tax liabilities relating to:
|
|
|
||||
Intangible assets
|
(49,559
|
)
|
(54,794
|
)
|
||
Fixed assets
|
(10,323
|
)
|
(10,715
|
)
|
||
Other
|
(12,765
|
)
|
(7,593
|
)
|
||
Total deferred tax liabilities
|
(72,647
|
)
|
(73,102
|
)
|
||
Valuation allowance
|
(7,911
|
)
|
(11,161
|
)
|
||
Net deferred tax liability
|
$
|
(25,127
|
)
|
$
|
(27,455
|
)
|
(in thousands)
|
Balance
at beginning
of year
|
|
Acquisition
related
change
|
|
Charges to
expense
|
|
Balance at
end of
year
|
|
||||
Year ended December 31,
|
||||||||||||
2015
|
$
|
11,161
|
|
$
|
—
|
|
$
|
(3,250
|
)
|
$
|
7,911
|
|
2014
|
11,042
|
|
—
|
|
119
|
|
11,161
|
|
||||
2013
|
10,651
|
|
635
|
|
(244
|
)
|
11,042
|
|
96
|
|
2015 Form 10-K
|
|
Years ended December 31,
|
|
|||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
|
|||
Balance at beginning of year
|
$
|
3,564
|
|
$
|
3,698
|
|
$
|
3,846
|
|
Increases from prior period positions
|
129
|
|
195
|
|
1,254
|
|
|||
Decreases in prior year positions
|
(651
|
)
|
(102
|
)
|
(813
|
)
|
|||
Increases from current period positions
|
257
|
|
1,046
|
|
224
|
|
|||
Settlements (payments)
|
(274
|
)
|
—
|
|
—
|
|
|||
Lapse of statute of limitations
|
(1
|
)
|
(1,273
|
)
|
(813
|
)
|
|||
Balance at end of year
|
$
|
3,024
|
|
$
|
3,564
|
|
$
|
3,698
|
|
2015 Form 10-K
|
|
97
|
|
Outstanding at December 31,
|
|
||
Award type
|
2015
|
|
2014
|
|
Restricted stock awards
|
1,096,839
|
|
812,451
|
|
Restricted stock units
|
396,198
|
|
274,733
|
|
Stock appreciation rights
|
757,203
|
|
983,473
|
|
Stock options
|
4,745
|
|
7,547
|
|
|
Years ended December 31,
|
|
|||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
|
|||
Included in cost of revenue:
|
|
|
|
||||||
Cost of subscriptions
|
$
|
1,130
|
|
$
|
687
|
|
$
|
1,032
|
|
Cost of maintenance
|
420
|
|
689
|
|
545
|
|
|||
Cost of services
|
1,944
|
|
2,229
|
|
2,464
|
|
|||
Total included in cost of revenue
|
3,494
|
|
3,605
|
|
4,041
|
|
|||
Included in operating expenses:
|
|
|
|
||||||
Sales and marketing
|
2,979
|
|
2,147
|
|
2,351
|
|
|||
Research and development
|
4,865
|
|
3,264
|
|
3,731
|
|
|||
General and administrative
|
13,908
|
|
8,329
|
|
6,787
|
|
|||
Total included in operating expenses
|
21,752
|
|
13,740
|
|
12,869
|
|
|||
Total stock-based compensation expense
|
$
|
25,246
|
|
$
|
17,345
|
|
$
|
16,910
|
|
98
|
|
2015 Form 10-K
|
Restricted stock awards
|
Restricted
stock awards
|
|
Weighted
average
grant-date
fair value
|
|
|
Weighted
average
remaining
contractual
term
(in years)
|
Aggregate
intrinsic value
(1)
(in thousands)
|
|
||
Unvested at January 1, 2015
|
812,451
|
|
$
|
32.28
|
|
|
|
|
||
Granted
|
736,252
|
|
48.82
|
|
|
|
|
|||
Vested
|
(339,216
|
)
|
31.39
|
|
|
|
|
|||
Forfeited
|
(112,648
|
)
|
35.98
|
|
|
|
|
|||
Unvested at December 31, 2015
|
1,096,839
|
|
$
|
43.28
|
|
|
8.2
|
$
|
72,238
|
|
Unvested and expected to vest at December 31, 2015
|
996,678
|
|
$
|
43.60
|
|
|
8.3
|
$
|
65,641
|
|
(1)
|
The intrinsic value is calculated as the market value as of the end of the fiscal period.
|
2015 Form 10-K
|
|
99
|
Restricted stock units
|
Restricted
stock units
|
|
Weighted
average
grant-date
fair value
|
|
|
Weighted
average
remaining
contractual
term
(in years)
|
Aggregate
intrinsic value
(1)
(in thousands)
|
|
||
Unvested at January 1, 2015
|
274,733
|
|
$
|
32.86
|
|
|
|
|
||
Granted
|
269,418
|
|
45.15
|
|
|
|
|
|||
Forfeited
|
(42,079
|
)
|
42.74
|
|
|
|
|
|||
Vested
|
(105,874
|
)
|
36.43
|
|
|
|
|
|||
Unvested at December 31, 2015
|
396,198
|
|
$
|
40.51
|
|
|
5.7
|
$
|
26,094
|
|
Unvested and expected to vest at December 31, 2015
|
352,531
|
|
$
|
40.59
|
|
|
5.8
|
$
|
23,218
|
|
(1)
|
The intrinsic value is calculated as the market value as of the end of the fiscal period.
|
Stock appreciation rights
|
Stock
appreciation
rights
|
|
Weighted
average
exercise
price
|
|
|
Weighted
average
remaining
contractual
term
(in years)
|
Aggregate
intrinsic value
(1)
(in thousands)
|
|
||
Outstanding at January 1, 2015
|
983,473
|
|
$
|
24.33
|
|
|
|
|
||
Exercised
|
(175,617
|
)
|
25.09
|
|
|
|
|
|||
Forfeited
|
(50,653
|
)
|
22.59
|
|
|
|
|
|||
Outstanding at December 31, 2015
|
757,203
|
|
$
|
24.27
|
|
|
3.2
|
$
|
31,492
|
|
Unvested and expected to vest at December 31, 2015
|
144,972
|
|
$
|
23.14
|
|
|
3.9
|
$
|
6,193
|
|
Vested and exercisable at December 31, 2015
|
594,621
|
|
$
|
24.55
|
|
|
3.0
|
$
|
24,561
|
|
(1)
|
The intrinsic value is calculated as the difference between the market value as of the end of the fiscal period and the exercise price of the shares.
|
100
|
|
2015 Form 10-K
|
Assumptions
|
2013
|
|
Volatility
|
32% - 35%
|
|
Dividend yield
|
1.7
|
%
|
Risk-free interest rate
|
0.6% - 0.8%
|
|
Expected SAR life in years
|
4
|
|
Plan
|
Date of adoption
|
|
Options
outstanding
|
|
|
Range of
exercise prices
|
Kintera 2003 Plan
|
July 8, 2008
|
(1)
|
2,314
|
|
|
$10.59 - $19.26
|
Convio 1999 Plan
|
May 5, 2012
|
(1)
|
1,841
|
|
|
$9.10 - $12.55
|
Convio 2009 Plan
|
May 5, 2012
|
(1)
|
590
|
|
|
$15.62 - $18.20
|
Total
|
|
|
4,745
|
|
|
|
(1)
|
In connection with the acquisitions of Kintera and Convio, we assumed certain stock options issued and outstanding at the date of acquisition.
|
Stock options
|
Stock
options
|
|
Weighted
average
exercise
price
|
|
|
Weighted
average
remaining
contractual
term
(in years)
|
Aggregate
intrinsic value
(1)
(in thousands)
|
|
||
Outstanding at January 1, 2015
|
7,547
|
|
$
|
11.49
|
|
|
|
|
||
Exercised
|
(2,802
|
)
|
11.31
|
|
|
|
|
|||
Outstanding at December 31, 2015
|
4,745
|
|
$
|
11.60
|
|
|
2.9
|
$
|
257
|
|
Vested and exercisable at December 31, 2015
|
4,745
|
|
$
|
11.60
|
|
|
2.9
|
$
|
257
|
|
(1)
|
The intrinsic value is calculated as the difference between the market value as of the end of the fiscal period and the exercise price of the shares.
|
2015 Form 10-K
|
|
101
|
Declaration Date
|
Dividend per Share
|
|
Record Date
|
|
Payable Date
|
|
February 2015
|
$
|
0.12
|
|
February 27
|
|
March 13
|
April 2015
|
$
|
0.12
|
|
May 28
|
|
June 15
|
July 2015
|
$
|
0.12
|
|
August 28
|
|
September 15
|
October 2015
|
$
|
0.12
|
|
November 25
|
|
December 15
|
102
|
|
2015 Form 10-K
|
|
Years ended December 31,
|
|
|||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
|
|||
Accumulated other comprehensive loss, beginning of period
|
$
|
(1,032
|
)
|
$
|
(1,385
|
)
|
$
|
(1,973
|
)
|
By component:
|
|
|
|
||||||
Gains and losses on cash flow hedges:
|
|
|
|
||||||
Accumulated other comprehensive (loss) income balance, beginning of period
|
$
|
(164
|
)
|
$
|
(256
|
)
|
$
|
(791
|
)
|
Other comprehensive income (loss) before reclassifications, net of tax effects of $514, $644 and $(30)
|
(818
|
)
|
(999
|
)
|
46
|
|
|||
Amounts reclassified from accumulated other comprehensive loss to interest expense
|
1,569
|
|
1,215
|
|
794
|
|
|||
Amounts reclassified from accumulated other comprehensive loss to loss on debt extinguishment and termination of derivative instruments
|
—
|
|
587
|
|
—
|
|
|||
Tax benefit included in provision for income taxes
|
(606
|
)
|
(711
|
)
|
(305
|
)
|
|||
Total amounts reclassified from accumulated other comprehensive loss
|
963
|
|
1,091
|
|
489
|
|
|||
Net current-period other comprehensive income (loss)
|
145
|
|
92
|
|
535
|
|
|||
Accumulated other comprehensive loss balance, end of period
|
$
|
(19
|
)
|
$
|
(164
|
)
|
$
|
(256
|
)
|
Foreign currency translation adjustment:
|
|
|
|
||||||
Accumulated other comprehensive loss balance, beginning of period
|
$
|
(868
|
)
|
$
|
(1,129
|
)
|
$
|
(1,182
|
)
|
Translation adjustments
|
62
|
|
261
|
|
53
|
|
|||
Accumulated other comprehensive loss balance, end of period
|
(806
|
)
|
(868
|
)
|
(1,129
|
)
|
|||
Accumulated other comprehensive loss, end of period
|
$
|
(825
|
)
|
$
|
(1,032
|
)
|
$
|
(1,385
|
)
|
2015 Form 10-K
|
|
103
|
•
|
The GMBU is focused on marketing, sales, delivery and support to all emerging and mid-sized prospects and customers in North America;
|
•
|
The ECBU is focused on marketing, sales, delivery and support to all large and/or strategic prospects and customers in North America; and
|
•
|
The IBU is focused on marketing, sales, delivery and support to all prospects and customers outside of North America.
|
|
Years ended December 31,
|
|
|||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
|
|||
Revenue by segment:
|
|
|
|
||||||
GMBU
|
$
|
313,935
|
|
$
|
270,637
|
|
$
|
240,413
|
|
ECBU
|
279,897
|
|
245,119
|
|
219,695
|
|
|||
IBU
|
41,997
|
|
47,068
|
|
42,148
|
|
|||
Other
(1)
|
2,111
|
|
1,597
|
|
1,561
|
|
|||
Total revenue
|
$
|
637,940
|
|
$
|
564,421
|
|
$
|
503,817
|
|
Segment operating income
(2)
:
|
|
|
|
||||||
GMBU
|
$
|
156,876
|
|
$
|
139,310
|
|
$
|
137,962
|
|
ECBU
|
137,162
|
|
121,285
|
|
111,745
|
|
|||
IBU
|
5,404
|
|
4,291
|
|
8,760
|
|
|||
Other
(1)
|
(120
|
)
|
1,585
|
|
1,642
|
|
|||
|
299,322
|
|
266,471
|
|
260,109
|
|
|||
Less:
|
|
|
|
||||||
Corporate unallocated costs
(3)
|
(195,146
|
)
|
(176,614
|
)
|
(167,059
|
)
|
|||
Stock based compensation costs
|
(25,246
|
)
|
(17,345
|
)
|
(16,910
|
)
|
|||
Amortization expense
|
(32,218
|
)
|
(26,148
|
)
|
(24,598
|
)
|
|||
Interest expense
|
(8,073
|
)
|
(6,011
|
)
|
(5,818
|
)
|
|||
Other expense, net
|
(1,687
|
)
|
(1,119
|
)
|
(395
|
)
|
|||
Income before provision for income taxes
|
$
|
36,952
|
|
$
|
39,234
|
|
$
|
45,329
|
|
(1)
|
Other includes revenue and the related costs from the sale of solutions and services not directly attributable to a reportable segment.
|
(2)
|
Segment operating income includes direct, controllable costs related to the sale of solutions and services by the reportable segment.
|
(3)
|
Corporate unallocated costs include research and development, depreciation expense, and certain corporate sales, marketing, general and administrative expenses.
|
104
|
|
2015 Form 10-K
|
|
Years ended December 31,
|
|
|||||||
(in thousands)
|
2015
|
|
2014
|
|
2013
|
|
|||
GMBU revenue:
|
|
|
|
||||||
Subscriptions
|
167,010
|
|
125,223
|
|
96,931
|
|
|||
Maintenance
|
83,974
|
|
86,840
|
|
85,028
|
|
|||
Services
|
56,294
|
|
48,814
|
|
47,769
|
|
|||
License fees and other
|
6,657
|
|
9,760
|
|
10,685
|
|
|||
Total GMBU revenue
|
$
|
313,935
|
|
$
|
270,637
|
|
$
|
240,413
|
|
|
|
|
|
||||||
ECBU revenue:
|
|
|
|
||||||
Subscriptions
|
147,719
|
|
121,484
|
|
102,992
|
|
|||
Maintenance
|
56,196
|
|
45,069
|
|
39,662
|
|
|||
Services
|
66,741
|
|
67,756
|
|
66,754
|
|
|||
License fees and other
|
9,241
|
|
10,810
|
|
10,287
|
|
|||
Total ECBU revenue
|
$
|
279,897
|
|
$
|
245,119
|
|
$
|
219,695
|
|
|
|
|
|
||||||
IBU revenue:
|
|
|
|
||||||
Subscriptions
|
16,885
|
|
16,703
|
|
12,747
|
|
|||
Maintenance
|
13,631
|
|
15,509
|
|
14,055
|
|
|||
Services
|
9,943
|
|
11,801
|
|
11,994
|
|
|||
License fees and other
|
1,538
|
|
3,055
|
|
3,352
|
|
|||
Total IBU revenue
|
$
|
41,997
|
|
$
|
47,068
|
|
$
|
42,148
|
|
|
|
|
|
||||||
Other revenue:
|
|
|
|
||||||
Subscriptions
|
145
|
|
25
|
|
(14
|
)
|
|||
Maintenance
|
—
|
|
—
|
|
—
|
|
|||
Services
|
—
|
|
—
|
|
31
|
|
|||
License fees and other
|
1,966
|
|
1,572
|
|
1,544
|
|
|||
Total Other revenue
|
$
|
2,111
|
|
$
|
1,597
|
|
$
|
1,561
|
|
Total consolidated revenue
|
$
|
637,940
|
|
$
|
564,421
|
|
$
|
503,817
|
|
(in thousands)
|
United
States
|
|
Canada
|
|
Europe
|
|
Australia
|
|
Total Foreign
|
|
Total
|
|
||||||
Revenue from external customers:
|
|
|
|
|
|
|
||||||||||||
2015
|
$
|
570,519
|
|
$
|
25,958
|
|
$
|
23,970
|
|
$
|
17,493
|
|
$
|
67,421
|
|
$
|
637,940
|
|
2014
|
491,731
|
|
26,944
|
|
27,411
|
|
18,335
|
|
72,690
|
|
564,421
|
|
||||||
2013
|
439,887
|
|
23,344
|
|
24,107
|
|
16,479
|
|
63,930
|
|
503,817
|
|
||||||
Property and equipment:
|
|
|
|
|
|
|
||||||||||||
December 31, 2015
|
$
|
49,682
|
|
$
|
58
|
|
$
|
1,501
|
|
$
|
1,410
|
|
$
|
2,969
|
|
$
|
52,651
|
|
December 31, 2014
|
47,419
|
|
34
|
|
1,869
|
|
574
|
|
2,477
|
|
49,896
|
|
2015 Form 10-K
|
|
105
|
(in thousands, except per share data)
|
December 31,
2015 |
|
September 30,
2015 |
|
June 30,
2015 |
|
March 31,
2015 |
|
||||
Total revenue
|
$
|
175,877
|
|
$
|
158,811
|
|
$
|
156,259
|
|
$
|
146,993
|
|
Gross profit
|
90,661
|
|
84,638
|
|
82,829
|
|
75,181
|
|
||||
Income from operations
|
10,271
|
|
13,968
|
|
14,461
|
|
8,012
|
|
||||
Income before provision for income taxes
|
7,255
|
|
12,344
|
|
11,314
|
|
6,039
|
|
||||
Net income
|
6,411
|
|
7,911
|
|
7,042
|
|
4,285
|
|
||||
Earnings per share
|
|
|
|
|
||||||||
Basic
(1)
|
$
|
0.14
|
|
$
|
0.17
|
|
$
|
0.15
|
|
$
|
0.09
|
|
Diluted
|
$
|
0.14
|
|
$
|
0.17
|
|
$
|
0.15
|
|
$
|
0.09
|
|
|
|
|
|
|
||||||||
(in thousands, except per share data)
|
December 31,
2014 |
|
September 30,
2014 |
|
June 30,
2014 |
|
March 31,
2014 |
|
||||
Total revenue
|
$
|
152,813
|
|
$
|
144,598
|
|
$
|
139,388
|
|
$
|
127,622
|
|
Gross profit
|
75,549
|
|
76,450
|
|
74,692
|
|
64,292
|
|
||||
Income from operations
|
7,589
|
|
13,502
|
|
15,996
|
|
9,277
|
|
||||
Income before provision for income taxes
|
5,450
|
|
12,276
|
|
14,906
|
|
6,602
|
|
||||
Net income
|
4,816
|
|
10,380
|
|
9,280
|
|
3,814
|
|
||||
Earnings per share
|
|
|
|
|
||||||||
Basic
|
$
|
0.11
|
|
$
|
0.23
|
|
$
|
0.21
|
|
$
|
0.08
|
|
Diluted
(1)
|
$
|
0.10
|
|
$
|
0.23
|
|
$
|
0.20
|
|
$
|
0.08
|
|
(1)
|
The individual amounts for each quarter may not sum to full year totals due to rounding.
|
106
|
|
2015 Form 10-K
|
2015 Form 10-K
|
|
107
|
108
|
|
2015 Form 10-K
|
2015 Form 10-K
|
|
109
|
1.
|
Financial statements
|
|
Page No.
|
|
|
|
|
|
|
|
|
|
|
|
|
2.
|
Financial statement schedules
|
3.
|
Exhibits
|
|
|
|
|
Filed In
|
||||||||
Exhibit Number
|
|
Description of Document
|
|
Registrant’s
Form
|
|
Dated
|
|
Exhibit
Number
|
|
Filed
Herewith
|
||
2.1
|
|
|
Agreement and Plan of Merger and Reincorporation dated April 6, 2004
|
|
S-1/A
|
|
4/6/2004
|
|
2.1
|
|
|
|
2.2
|
|
|
Stock Purchase Agreement dated January 16, 2007 by and among Target Software, Inc., Target Analysis Group, Inc., all of the stockholders of Target Software, Inc. and Target Analysis Group, Inc., Charles Longfield, as stockholder representative, and Blackbaud, Inc.
|
|
8-K
|
|
1/18/2007
|
|
2.2
|
|
|
|
2.3
|
|
|
Agreement and Plan of Merger dated as of May 29, 2008 by and among Blackbaud, Inc., Eucalyptus Acquisition Corporation and Kintera, Inc.
|
|
8-K
|
|
5/30/2008
|
|
2.3
|
|
|
|
2.4
|
|
|
Share Purchase Agreement dated as of April 29, 2009 between RLC Group B.V., as the Seller, and Blackbaud, Inc., as the Purchaser
|
|
10-Q
|
|
8/7/2009
|
|
10.42
|
|
|
|
2.5
|
|
*
|
Stock Purchase Agreement dated as of February 1, 2011 by and among Public Interest Data, Inc., all for the stockholders of Public Interest Data, Inc., Stephen W. Zautke, as stockholder representative and Blackbaud, Inc.
|
|
10-Q
|
|
5/10/2011
|
|
2.3
|
|
|
|
2.6
|
|
|
Agreement and Plan of Merger dated as of January 16, 2012 by and among Blackbaud, Inc., Caribou Acquisition Corporation and Convio, Inc.
|
|
8-K
|
|
1/17/2012
|
|
2.4
|
|
|
|
110
|
|
2015 Form 10-K
|
|
|
|
|
Filed In
|
||||||||
Exhibit Number
|
|
|
Description of Document
|
|
Registrant’s
Form
|
|
Dated
|
|
Exhibit
Number
|
|
Filed
Herewith
|
|
2.7
|
|
|
Stock Purchase Agreement dated as of October 6, 2011 by and among Everyday Hero Pty. Ltd., all of the stockholders of Everyday Hero Pty. Ltd., Nathan Betteridge as stockholder representative and Blackbaud Pacific Pty. Ltd.
|
|
10-K
|
|
2/29/2012
|
|
2.7
|
|
|
|
2.8
|
|
|
Purchase Agreement, dated August 30, 2014, by and among MicroEdge Holdings, LLC, Blackbaud, Inc, direct and indirect holders of all of the outstanding equity interests of MicroEdge Holdings, LLC, and VFF I AIV I, L.P., as Sellers’ Representative.
|
|
8-K
|
|
10/2/2014
|
|
10.76
|
|
|
|
2.9
|
|
|
Unit Purchase Agreement, dated as of August 10, 2015, by and between Smart Tuition Holdings, LLC and Blackbaud, Inc.
|
|
8-K
|
|
10/8/2015
|
|
10.78
|
|
|
|
3.0
|
|
|
Amendment, Consent and Waiver, Agreement dated as of October 2, 2015, by and between Smart Tuition Holdings, LLC and Blackbaud, Inc.
|
|
8-K
|
|
10/8/2015
|
|
10.79
|
|
|
|
3.4
|
|
|
Amended and Restated Certificate of Incorporation of Blackbaud, Inc.
|
|
DEF 14A
|
|
4/30/2009
|
|
|
|
|
|
3.5
|
|
|
Amended and Restated Bylaws of Blackbaud, Inc.
|
|
8-K
|
|
3/22/2011
|
|
3.4
|
|
|
|
10.6
|
|
†
|
Blackbaud, Inc. 1999 Stock Option Plan, as amended
|
|
S-1/A
|
|
4/6/2004
|
|
10.6
|
|
|
|
10.8
|
|
†
|
Blackbaud, Inc. 2001 Stock Option Plan, as amended
|
|
S-1/A
|
|
4/6/2004
|
|
10.8
|
|
|
|
10.20
|
|
†
|
Blackbaud, Inc. 2004 Stock Plan, as amended, together with Form of Notice of Stock Option Grant and Stock Option Agreement
|
|
8-K
|
|
6/20/2006
|
|
10.20
|
|
|
|
10.26
|
|
†
|
Form of Notice of Restricted Stock Grant and Restricted Stock Agreement under the Blackbaud, Inc. 2004 Stock Plan
|
|
10-K
|
|
2/28/2007
|
|
10.26
|
|
|
|
10.27
|
|
†
|
Form of Notice of Stock Appreciation Rights Grant and Stock Appreciation Rights Agreement under the Blackbaud, Inc. 2004 Stock Plan
|
|
10-K
|
|
2/28/2007
|
|
10.27
|
|
|
|
10.33
|
|
†
|
Blackbaud, Inc. 2008 Equity Incentive Plan
|
|
DEF 14A
|
|
4/29/2008
|
|
|
|
|
|
10.34
|
|
†
|
Form of Notice of Grant and Stock Option Agreement under Blackbaud, Inc. 2008 Equity Incentive Plan
|
|
S-8
|
|
8/4/2008
|
|
10.34
|
|
|
|
10.35
|
|
†
|
Form of Notice of Grant and Restricted Stock Agreement under Blackbaud, Inc. 2008 Equity Incentive Plan
|
|
S-8
|
|
8/4/2008
|
|
10.35
|
|
|
|
10.36
|
|
†
|
Form of Notice of Grant and Stock Appreciation Rights Agreement under Blackbaud, Inc. 2008 Equity Incentive Plan
|
|
S-8
|
|
8/4/2008
|
|
10.36
|
|
|
|
10.37
|
|
†**
|
Kintera, Inc. 2000 Stock Option Plan, as amended, and form of Stock Option Agreement thereunder
|
|
10-K/A
|
|
3/26/2008
|
|
10.2
|
|
|
|
10.38
|
|
†**
|
Kintera, Inc. Amended and Restated 2003 Equity Incentive Plan, as amended, and form of Stock Option Agreement thereunder
|
|
10-K/A
|
|
3/26/2008
|
|
10.3
|
|
|
|
10.39
|
|
†
|
Form of Retention Agreement
|
|
10-Q
|
|
11/10/2008
|
|
10.37
|
|
|
|
10.40
|
|
|
Triple Net Lease Agreement dated as of October 1, 2008 between Blackbaud, Inc. and Duck Pond Creek-SPE, LLC
|
|
8-K
|
|
12/11/2008
|
|
10.37
|
|
|
|
10.41
|
|
†
|
Blackbaud, Inc. 2009 Equity Compensation Plan for Employees from Acquired Companies
|
|
S-8
|
|
7/2/2009
|
|
10.41
|
|
|
|
10.49
|
|
†
|
Employment Agreement dated November 7, 2008 between Blackbaud, Inc. and Charlie Cumbaa
|
|
10-Q
|
|
11/8/2011
|
|
10.49
|
|
|
|
2015 Form 10-K
|
|
111
|
|
|
|
|
Filed In
|
||||||||
Exhibit Number
|
|
|
Description of Document
|
|
Registrant’s
Form
|
|
Dated
|
|
Exhibit
Number
|
|
Filed
Herewith
|
|
10.50
|
|
†
|
Employment Agreement dated June 25, 2008 between Blackbaud, Inc. and Kevin Mooney
|
|
10-Q
|
|
11/8/2011
|
|
10.50
|
|
|
|
10.55
|
|
†
|
Employment Agreement dated November 14, 2011 between Blackbaud, Inc. and Anthony W. Boor
|
|
10-K
|
|
2/29/2012
|
|
10.55
|
|
|
|
10.59
|
|
†***
|
Convio, Inc. 2009 Amended and Restated Stock Incentive Plan, as amended, and forms of stock option agreements
|
|
S-1/A
|
|
3/19/2010
|
|
10.1
|
|
|
|
10.60
|
|
†***
|
Convio, Inc. Form of Nonstatutory Stock Option Notice (Double Trigger)
|
|
8-K
|
|
2/28/2011
|
|
10.1
|
|
|
|
10.61
|
|
†***
|
Convio, Inc. Form of Restricted Stock Unit Notice (Double Trigger) and Agreement
|
|
8-K
|
|
2/28/2011
|
|
10.2
|
|
|
|
10.62
|
|
†***
|
Convio, Inc. 1999 Stock Option/Stock Issuance Plan, as amended, and forms of stock option agreements
|
|
S-1
|
|
1/22/2010
|
|
10.2
|
|
|
|
10.63
|
|
†
|
Blackbaud, Inc. 2008 Equity Incentive Plan, as amended
|
|
8-K
|
|
6/26/2012
|
|
10.59
|
|
|
|
10.64
|
|
†
|
Amendment to the Blackbaud, Inc. 2008 Equity Incentive Plan
|
|
8-K
|
|
6/26/2012
|
|
10.60
|
|
|
|
10.65
|
|
†
|
Form of Employment Agreement between Blackbaud, Inc. and each of Anthony W. Boor, Charles T. Cumbaa, Jana B. Eggers, Kevin W. Mooney and Joseph D. Moye
|
|
10-K
|
|
2/26/2013
|
|
10.65
|
|
|
|
10.66
|
|
|
Lease Amendment and Remediation Agreement entered into as of March 22, 2013, by and between Blackbaud, Inc. and Duck Pond Creek-SPE, LLC.
|
|
8-K
|
|
3/28/2013
|
|
10.66
|
|
|
|
10.68
|
|
†
|
Form of Management Transition Retention Agreement between Blackbaud, Inc. and each of Anthony W. Boor, Charles T. Cumbaa, Jana B. Eggers, Kevin W. Mooney and Joseph D. Moye
|
|
10-Q
|
|
5/7/2013
|
|
10.68
|
|
|
|
10.69
|
|
†
|
Management Transition Retention Agreement between Blackbaud, Inc. and Bradley J. Holman
|
|
10-Q
|
|
5/7/2013
|
|
10.69
|
|
|
|
10.70
|
|
†
|
Letter Agreement dated October 23, 2013 between Blackbaud, Inc. and Anthony W. Boor
|
|
8-K
|
|
10/25/2013
|
|
10.70
|
|
|
|
10.71
|
|
†
|
Offer Letter Agreement dated November 7, 2013 between Blackbaud, Inc. and Michael P. Gianoni
|
|
10-K
|
|
2/26/2014
|
|
10.71
|
|
|
|
10.72
|
|
†
|
Employment and Noncompetition Agreement dated November 8, 2013 between Blackbaud, Inc. and Michael P. Gianoni
|
|
10-K
|
|
2/26/2014
|
|
10.72
|
|
|
|
10.73
|
|
|
Credit Agreement, dated as of February 28, 2014, by and among Blackbaud, Inc., as Borrower, the lenders referred to therein, SunTrust Bank, as Administrative Agent, Swingline Lender and an Issuing Lender, Bank of America, N.A., as an Issuing Lender and Syndication Agent, and Regions Bank and Fifth Third Bank as Co-Documentation Agents with SunTrust Robinson Humphrey, Inc., Merrill Lynch, Pierce Fenner & Smith Incorporated and Fifth Third Bank, as Joint Lead Arrangers and Joint Bookrunners.
|
|
8-K
|
|
3/3/2014
|
|
10.73
|
|
|
|
10.74
|
|
|
Pledge Agreement, dated as of February 28, 2014, by Blackbaud and Convio in favor of SunTrust Bank, as Administrative Agent, for the ratable benefit of itself and the secured parties referred to therein.
|
|
8-K
|
|
3/3/2014
|
|
10.74
|
|
|
|
112
|
|
2015 Form 10-K
|
|
|
|
|
Filed In
|
||||||||
Exhibit Number
|
|
|
Description of Document
|
|
Registrant’s
Form
|
|
Dated
|
|
Exhibit
Number
|
|
Filed
Herewith
|
|
10.75
|
|
|
Guaranty Agreement, dated as of February 28, 2014, by Convio in favor of SunTrust Bank, as Administrative Agent, for the ratable benefit of itself and the secured parties referred to therein.
|
|
8-K
|
|
3/3/2014
|
|
10.75
|
|
|
|
10.77
|
|
|
Employment contract between Blackbaud, Inc. and Bradley J. Holman
|
|
10-Q
|
|
8/6/2015
|
|
10.77
|
|
|
|
10.80
|
|
†
|
Deed of Release dated October 29, 2015 by and between Bradley J. Holman and Blackbaud Pacific Pty Ltd.
|
|
|
|
|
|
|
|
X
|
|
10.81
|
|
†
|
Amended and Restated Employment and Noncompetition Agreement dated December 9, 2015 between Blackbaud, Inc. and Michael P. Gianoni
|
|
|
|
|
|
|
|
X
|
|
21.1
|
|
|
Subsidiaries of Blackbaud, Inc.
|
|
|
|
|
|
|
|
X
|
|
23.1
|
|
|
Consent of Independent Registered Public Accounting Firm
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
|
Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
|
Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
X
|
|
32.1
|
|
|
Certification by the Chief Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
X
|
|
32.2
|
|
|
Certification by the Chief Financial Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
X
|
|
101.INS
|
|
****
|
XBRL Instance Document
|
|
|
|
|
|
|
|
X
|
|
101.SCH
|
|
****
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
X
|
|
101.CAL
|
|
****
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
X
|
|
101.DEF
|
|
****
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
X
|
|
101.LAB
|
|
****
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
X
|
|
101.PRE
|
|
****
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
X
|
*
|
The registrant has applied for an extension of the confidential treatment it was previously granted with respect to portions of this exhibit. Those portions have been omitted from the exhibit and filed separately with the U.S. Securities and Exchange Commission.
|
**
|
The Kintera, Inc. 2000 Stock Option Plan, as amended, and form of Stock Option Agreement thereunder (“Kintera 2000 Plan Documents”) and the Kintera, Inc. Amended and Restated 2003 Equity Incentive Plan, as amended, and form of Stock Option Agreement thereunder (“Kintera 2003 Plan Documents”) were filed by Kintera in its Form 10-K/A on March 26, 2008 as Exhibits 10.2 and 10.3, respectively. We assumed the Kintera 2000 Plan Documents and Kintera 2003 Plan Documents when we acquired Kintera in July 2008. We filed the Kintera 2000 Plan Documents and Kintera 2003 Plan Documents by incorporation by reference as exhibits 10.37 and 10.38, respectively, in our Form S-8 on August 4, 2008.
|
2015 Form 10-K
|
|
113
|
***
|
The Convio, Inc. 2009 Amended and Restated Stock Incentive Plan, as amended, and forms of stock option agreements thereunder (“Convio 2009 Original Plan Documents”) and the Convio, Inc. 1999 Stock Option/Stock Issuance Plan, as amended, and forms of stock option agreements thereunder (“Convio 1999 Plan Documents”) were filed by Convio in its Forms S-1/A and S-1, filed March 19, 2010 and January 25, 2010 as exhibits 10.1 and 10.2, respectively. The Convio, Inc. Form of Nonstatutory Stock Option Notice (Double Trigger) and Convio, Inc. Form of Restricted Stock Unit Notice (Double Trigger) and Agreement were filed by Convio in its Form 8-K on February 28, 2011 as exhibits 10.1 and 10.2 (together with the Convio 2009 Original Plan Documents, the “Convio 2009 Plan Documents”). We assumed the Convio 2009 Plan Documents and Convio 1999 Plan Documents when we acquired Convio in May 2012. We filed the Convio 2009 Plan Documents and Convio 1999 Plan Documents by incorporation by reference as exhibits 10.59, 10.60, 10.61 and 10.62 in our Form S-8 on May 7, 2012.
|
****
|
Pursuant to Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Annual Report on Form 10-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to liability of that Section, and shall not be part of any registration statement or other document filed under the Securities Act of the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
|
†
|
Indicates management contract or compensatory plan, contract or arrangement.
|
114
|
|
2015 Form 10-K
|
|
|
|
|
|
Blackbaud, Inc.
|
|
|
|
Signed:
|
February 24, 2016
|
/S/ MICHAEL P. GIANONI
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/S/ MICHAEL P. GIANONI
|
|
President, Chief Executive Officer and Director (Principal Executive Officer)
|
|
Date:
|
February 24, 2016
|
|
Michael P. Gianoni
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/S/ ANTHONY W. BOOR
|
|
Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
Date:
|
February 24, 2016
|
|
Anthony W. Boor
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/S/ ANDREW M. LEITCH
|
|
Chairman of the Board of Directors
|
|
Date:
|
February 24, 2016
|
|
Andrew M. Leitch
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/S/ TIMOTHY CHOU
|
|
Director
|
|
Date:
|
February 24, 2016
|
|
Timothy Chou
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/S/ GEORGE H. ELLIS
|
|
Director
|
|
Date:
|
February 24, 2016
|
|
George H. Ellis
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/S/ DAVID G. GOLDEN
|
|
Director
|
|
Date:
|
February 24, 2016
|
|
David G. Golden
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/S/ SARAH E. NASH
|
|
Director
|
|
Date:
|
February 24, 2016
|
|
Sarah E. Nash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/S/ JOYCE M. NELSON
|
|
Director
|
|
Date:
|
February 24, 2016
|
|
Joyce M. Nelson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/S/ PETER J. KIGHT
|
|
Director
|
|
Date:
|
February 24, 2016
|
|
Peter J. Kight
|
|
|
|
|
2015 Form 10-K
|
|
115
|
1.
|
Blackbaud Pacific Pty Ltd
ACN 095 925 170 of Level 2, 65 Berry Street, North Sydney, New South Wales 2060 Australia (
Company
); and
|
2.
|
Brad Holman
of 1 Bourmac Avenue, Northbridge, NSW 2063, (
Employee
).
|
A.
|
The Employee commenced employment with the Company on 1 November 2010 most recently in the position of President, International Business Unit (
Employment
).
|
B.
|
On 28 September 2015, following a consultation process between the Company's representative and the Employee concerning the potential removal of the Employee’s position, it was determined the Employee would leave his employment with the Company due to his role being made redundant.
(
Employment Separation
).
|
C.
|
Without admission of liability, the parties have agreed to resolve all matters relating to or in connexion with the Employment, the Employment Separation and all other matters arising between them on the terms set out in this Deed.
|
1.
|
Interpretation
|
1.1
|
In this Deed:
|
(a)
|
clause headings are for convenience only and do not affect interpretation; and unless the context otherwise requires;
|
(b)
|
references to any statute or statutory provisions shall include any modification or re-enactment of, or any legislative provisions substituted for, and all legislation and statutory instruments issued under such legislation or such provision;
|
(c)
|
words denoting the singular shall include the plural and vice versa, words denoting any gender shall include all genders, words denoting individuals shall include corporations, associations, trustees, instrumentalities and partnerships and vice versa;
|
(d)
|
reference to parties, parts, clauses, annexures and schedules are references to parties, parts, clauses, annexures and schedules to this agreement as modified or varied from time to time;
|
(e)
|
Claims
means any and all claims, demands, actions, or proceedings (legal, equitable or statutory) including any civil remedy provisions under the
Fair Work Act 2009
, whether known or unknown, which the Employee has now or may have in the future have against the Company or the Group arising out of or in connexion with:
|
(i)
|
the Employment; and
|
(ii)
|
the Employment Separation.
|
(f)
|
Group
means the Company and each and any related body corporate and the directors, employees, servants and agents of the Company and each related body corporate; and
|
(g)
|
Related body corporate
means a company that is:
|
(i)
|
a subsidiary of the Company;
|
(ii)
|
a holding company of the Company; or
|
(iii)
|
a subsidiary of a holding company of the Company.
|
2.
|
Settlement
|
2.1
|
The Employee’s final date of employment with the Company shall be 31 December 2015 (Separation Date).
|
2.2
|
Upon execution of this Deed and for the promise of the payment and terms set out in clause 3, the Employee provides the releases set out in clause 5.
|
3.
|
Obligations
|
3.1
|
Subject to the Company receiving by 5pm on 31 October 2015 a copy of this Deed signed by the Employee the Company will:
|
(a)
|
pay to the Employee AU$ 588,030
calculated in accordance with Schedule 1 into the Employee's nominated bank account on or about the Separation Date (
Settlement
Payment
); and
|
(b)
|
provide to the Employee a written statement of service on or about the Separation Date (
Statement of Service
) confirming the Employee's position, duties performed and dates of employment.
|
3.2
|
The Employee acknowledges that:
|
(a)
|
the Settlement Payment meets and exceeds his contractual and statutory entitlements payable on termination; and
|
(b)
|
tax will be withheld from the Settlement Payment, and that the amount of tax withheld may not represent the total tax payable on assessment.
|
(c)
|
Post Termination restrictions as detailed in their employment contract dated July 2015 remain in force (attached)
|
3.3
|
The Company makes no representations or warranties in relation to the Employee's tax liability in relation to any payment under this Deed.
|
3.4
|
If the Company withholds tax from any payment made to the Employee under this Deed and the Australian Taxation Office determines that a greater amount of tax should have been withheld, the Employee must indemnify the Company in respect of the difference.
|
4.
|
Other obligations
|
4.1
|
The Employee will:
|
(a)
|
return any Company property in his possession to the Sydney Office by Friday 18 December 2015.
|
(b)
|
not post, disclose or publish any details or information about the fact and circumstances of the Deed or any other matter concerning the same subject matter as that referred to in the Background to this Deed on any social media forum including Facebook, Twitter or LinkedIn;
|
(c)
|
amend his LinkedIn profile, upon receipt of the Settlement Payment, to make it clear that he is no longer employed by Company and no longer performs work for the Company in any capacity.
|
5.
|
Release and Discharge
|
5.1
|
In consideration of this Deed and the promise to make the Settlement Payment, the Employee releases and forever discharges the Company and the Group from all and any Claims arising from or in connection with the Employment and the Employment Separation.
|
6.
|
Confidentiality of Deed
|
6.1
|
The parties to this Deed each agree that the fact and circumstances of the Deed are strictly confidential and they will maintain confidentiality in relation to the terms of settlement contained in this Deed and must not disclose those matters to any person, directly or indirectly, except:
|
(a)
|
as required by law;
|
(b)
|
for the purpose of obtaining financial or legal advice;
|
(c)
|
for the purpose of enforcing this Deed,
|
6.2
|
The Employee acknowledges that the confidentiality obligations in his contract of employment dated July, 2015 survive the termination of his employment.
|
7.
|
Non Disparagement
|
7.1
|
The Employee will not make or publish any adverse, disparaging or other comments that are intended to have the effect of bringing the Company, its officers, employees, agents into disrepute.
|
7.2
|
The Employee is to direct all enquiries regarding the Employment to John Mistretta, who will confirm the matters contained in the Statement of Service. If asked any further questions, John Mistretta will say that the Company's policy is not to provide verbal references, and that it wishes to add nothing further over what it has written in the Statement of Service.
|
8.
|
Warranties
|
(a)
|
he enters into this Deed voluntarily and bears his own costs in respect of executing the Deed;
|
(b)
|
he has had the opportunity to obtain legal advice as to the significance and effect of executing this Deed;
|
(c)
|
he understands the legal significance and effect of executing this Deed;
|
(d)
|
the Company (and any of its officers, employees, servants, agents or advisers) has not made any promise, representation or inducement or been party to any conduct material to the Employee entering into this Deed other than as set out in this Deed; and
|
(e)
|
he is aware that the Company is relying upon these warranties.
|
9.
|
Bar to Proceedings
|
10.
|
Benefit
|
11.
|
General
|
11.1
|
This Deed contains the entire understanding of the parties about, and supersedes all previous communications on, the matters referred to or contained in this Deed.
|
11.2
|
This Deed may consist of a number of counterparts and if so, the counterparts taken together constitute one and the same Deed.
|
11.3
|
This Deed cannot be amended or varied except in writing signed by the parties.
|
12.
|
Governing Law
|
Executed
by
Blackbaud Pacific Pty Ltd
ACN
095 925 170in accordance with section 127(1)
of the
Corporations Act 2001 (Cth)
:
|
|
|
|
|
|
/s/ Anthony Boor
|
|
|
Signature of director
|
|
|
|
|
|
|
|
|
Anthony Boor
|
|
|
Name
(please print)
|
|
|
Signed, sealed and delivered
by
Brad Holman
in the presence of:
|
)
)
)
|
|
|
|
|
/s/ Andrew Stevens
|
|
/s/ Brad Holman
|
Signature of Witness
|
|
Signature of Brad Holman
|
|
|
|
|
|
|
Andrew Stevens
|
|
|
Name
(please print)
|
|
|
|
AU$ Amount
|
|
Redundancy Pay (10 weeks)
|
$75,388
|
|
Additional Severance Pay
|
$513,642
|
|
Total
|
$588,030
|
|
1.
|
The Employee will remain active and in his current role up to and including 31 October 2015, and remain available for calls as required from 1 November to 31 December 2015.
|
2.
|
The 3 month contractual notice period has been served and ends on 31 December 2015
|
3.
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All Accrued Annual Leave is deemed to have been taken during the period 1 November to 31 December.
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4.
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Accrued Long Service Leave will be paid out as the employee has in excess of 5 years service.
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5.
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Service Based LTIP Allocations due to vest in February 2016 and November 2016 (see below) will be accelerated, vesting on 31 December 2015;
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6.
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Performance Based LTIP Allocations due to vest in February 2016 (see below) will be accelerated if the appropriate performance has been achieved based on unaudited results as at 31 December 2015
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Grant Date
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LTIP Type
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Number of Shares
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Original Vest Date
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13-Feb-15
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PRSU
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3,803
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13-Feb-16
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7.
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All other unvested LTIP allocations will be forfeited (2017-2019).
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8.
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You will not be eligible for your 2015 Bonus. However, if achievement under your bonus plan exceeds 100% of target, you will be paid the excess amount over 100% of your On Target Bonus amount. Any such payments would be calculated in line with the IBU and Corporate bonus plans, and will be paid by the end of March 2016, subject to normal payroll deductions.
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If to the Company:
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Blackbaud, Inc.
2000 Daniel Island Drive Charleston, South Carolina 29492 Attention: Vice President and General Counsel |
With a copy to:
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Blackbaud, Inc.
2000 Daniel Island Drive Charleston, South Carolina 29492 Attention: Senior Vice President of Human Resources |
If to Executive:
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Michael P. Gianoni
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COMPANY:
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BLACKBAUD, INC.
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By:
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/s/ Andrew Leitch
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Name: Andrew Leitch
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Title: Chairman of the Board
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EXECUTIVE:
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/s/ Michael P. Gianoni
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Michael P. Gianoni
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EMPLOYEE:
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/s/ Michael P. Gianoni
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Michael P. Gianoni
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COMPANY:
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BLACKBAUD, INC.
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By: /s/ Andrew Leitch
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Name: Andrew Leitch
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Title: Chairman of the Board
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1.
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Separation of Employment; Accrued Compensation
. Employee’s last date of employment with Blackbaud will be __________________________ (the “
Separation Date
”). Regardless of whether Employee signs this Agreement, in accordance with Section 5.1 of the Employment Agreement, Blackbaud will make payment to Employee for: (a) any accrued, unpaid Base Salary through the Separation Date; (b) payment for any Bonus Compensation which has been awarded but not paid for calendar years prior to the year in which termination of Employee’s employment occurs (except in the case of Employee’s termination for Cause or resignation without Good Reason, unless other required by applicable law); (c) reimbursement for any unreimbursed expenses in accordance with the Company’s policies; and (d) payment of other amounts, entitlements and/or benefits, if any, to which Employee is entitled in accordance with applicable law and applicable plans, programs, arrangements and/or other agreements of the Company and any affiliate.
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2.
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Severance Benefits
. If Employee executes this Agreement in accordance with [Section 5.2, 5.3 or 5.7 (as applicable)] of the Employment Agreement and does not revoke it as permitted by Section 14 hereof, Employee will receive the following severance benefits:
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3.
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Consideration to Employee
. In consideration of Employee’s execution of this Agreement, Blackbaud will provide Employee with the payments and benefits described in Section 2 herein.
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4.
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Blackbaud Benefits
. Employee understands and agrees that except as specifically provided in Section 1 and Section 2 of this Agreement, his entitlement to all Blackbaud-provided benefits will cease as of the Separation Date.
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5.
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Post-Termination Obligations
. Employee acknowledges, agrees, and hereby affirms that while employed by Blackbaud, he was subject to valid and enforceable non-solicitation, non-disclosure and non-competition obligations (as provided in Section 7 of the Employment Agreement and in
Exhibit A
thereto, both of which are incorporated herein by reference as if fully set out herein) that placed certain restrictions on Employee during his employment and continue to apply, by their terms, following his separation from employment with Blackbaud for any reason. Employee acknowledges and agrees that these non-solicitation, non-disclosure and non-competition obligations are and at all times have been fully enforceable against him. Employee acknowledges and agrees that such provisions of the Employment Agreement and related Employee Nondisclosure and Developments Agreement will continue to apply following the Separation Date and are fully enforceable. Employee acknowledges and agrees that he has read and understands these non-solicitation and non-competition obligations and the obligations under the Employee Nondisclosure and Developments Agreement and has had the opportunity to consult with counsel regarding these obligations.
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6.
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COBRA Election
. Upon loss of health care coverage, Employee will be entitled to elect continuation of his health care coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986 (“
COBRA
”). Blackbaud will provide Employee with information explaining his right to continue his medical and dental coverage under COBRA after the Separation Date.
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7.
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Return of Blackbaud Property
. Employee relinquishes all right, title and interest to, and will return to Blackbaud all property belonging to Blackbaud, including, but not limited to, equipment, identification cards, keys, corporate credit card(s), customer lists, information, confidential information, trade secrets, developments, forms, formulae, plans, documents, systems, designs, methodologies, product features, technology, and other written and computer materials, and copies of the same, belonging to Blackbaud, its affiliates, or any of their customers, within Employee’s possession or control and he will not at any time copy or reproduce the same. Notwithstanding any other provision hereof, Employee will be entitled to retain (a) papers and other materials of a personal nature, including without limitation personal photographs, personal correspondence, personal diaries, personal calendars and personal rolodexes, personal phone books and files
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8.
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Release of Claims
. In consideration of the payments and benefits granted hereunder, Employee, on behalf of himself and his heirs and assigns, hereby irrevocably and unconditionally releases and forever discharges, except as to obligations arising under this Agreement, Blackbaud, its officers, directors, affiliates, agents and employees, and their successors and assigns, from any and all claims, causes of action, liability, damages, expenses and/or losses of whatever kind or nature (including related attorneys’ fees and costs), in law or equity, known or unknown, suspected or unsuspected, that Employee may now have or has ever had arising directly or indirectly out of the Employment Agreement (including any and all attachments thereto), his employment, or his separation from employment, with Blackbaud, by reason of any act, omission, transaction, or event occurring up to and including the date of the signing of this Agreement.
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9.
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Entire Agreement
. This Agreement constitutes the entire agreement and understanding between Employee and Blackbaud with respect to all matters pertaining to Employee’s employment and termination, except that nothing herein will be deemed to modify or release any of Employee’s continuing obligations to Blackbaud under the Employment Agreement, or any other confidentiality, trade secret and invention assignment agreement signed by Employee.
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10.
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Governing Law
. This Agreement will be construed under the laws of South Carolina, without regard to conflict of law principles.
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11.
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Arbitration
. In the event of any dispute or claim arising out of or in connection with this Agreement or the enforcement of rights hereunder, such dispute or claim shall be submitted to binding arbitration in accordance with S.C. Code Ann. § 15-48-10
et
seq.
, as amended, and the then-current rules and procedures of the American Arbitration Association’s (the “
AAA’s
”) National Rules for the
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12.
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No Admissions
. The promises and payments described herein are not to be construed as an admission of any liability by either party with respect to any federal, state or local statute or regulation or other common law claims. The promises and payments made herein are in consideration of Employee’s release of claims against Blackbaud.
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13.
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Voluntary Execution
. Employee understands and acknowledges that he was advised and is hereby advised in writing to consult with an attorney before executing this Agreement, and further acknowledges that he has been given a reasonable opportunity to do so. By signing below, Employee acknowledges that he has been afforded at least twenty-one (21) days from the date of his receipt of this Agreement to review and consider the Agreement’s terms.
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14.
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Right to Revoke
. Employee understands, agrees, and acknowledges that he has seven (7) days following his execution of this Agreement to revoke the Agreement and has been, and hereby is, advised that this Agreement will not become effective or enforceable, and all payments or obligations recited herein will not be paid, until the revocation period has expired. Revocation must be in writing and received by Blackbaud’s Senior Vice President of Human Resources before the end of business on the seventh (7th) day after Employee’s execution of this Agreement.
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15.
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Binding Effect
. This Agreement is binding upon and shall inure to the benefit of the parties and their respective agents, assigns, heirs, executors, successors and administrators.
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16.
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Section 409A
. The provisions of Section 23 of the Employment Agreement are incorporated herein by reference and will continue to apply in accordance with their terms, including without limitation, to any payments under this Agreement.
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Organized Under Laws of:
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Blackbaud, Inc.
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Delaware
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Subsidiaries
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AngelPoints, LLC
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Delaware
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Blackbaud Asia Limited
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Hong Kong
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Blackbaud Canada, Inc.
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Canada
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Blackbaud Europe Ltd.
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Scotland
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Blackbaud Global Ltd.
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England and Wales
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Blackbaud, LLC
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South Carolina
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Blackbaud Pacific Pty. Ltd.
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Australia
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Convio, LLC
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Delaware
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Everyday Hero Ltd.
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England and Wales
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Everyday Hero Pty. Ltd.
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Australia
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Microedge Holdings, LLC
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Delaware
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Microedge Intermediate Holdings, LLC
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Delaware
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Microedge, LLC
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New York
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MyCharity, Ltd.
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Ireland
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NPO Account Services, LLC
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Delaware
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Public Interest Data, LLC
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Virginia
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Smart, LLC
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Delaware
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VFF I AIV I Corp.
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Delaware
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WhippleHill Communications, LLC
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New Hampshire
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/S/ PRICEWATERHOUSECOOPERS LLP
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Charlotte, North Carolina
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February 24, 2016
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1.
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I have reviewed this annual report on Form 10-K of Blackbaud, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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February 24, 2016
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By:
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/s/ Michael P. Gianoni
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Michael P. Gianoni
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President and Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this annual report on Form 10-K of Blackbaud, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date:
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February 24, 2016
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By:
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/s/ Anthony W. Boor
|
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Anthony W. Boor
|
|
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Executive Vice President and Chief Financial Officer
|
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(Principal Financial and Accounting Officer)
|
1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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February 24, 2016
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By:
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/s/ Michael P. Gianoni
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Michael P. Gianoni
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President and Chief Executive Officer
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(Principal Executive Officer)
|
1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date:
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February 24, 2016
|
By:
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/s/ Anthony W. Boor
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Anthony W. Boor
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Executive Vice President and Chief Financial Officer
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(Principal Financial and Accounting Officer)
|