þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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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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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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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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First Quarter 2016 Form 10-Q
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1
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
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2
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First Quarter 2016 Form 10-Q
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PART I. FINANCIAL INFORMATION
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First Quarter 2016 Form 10-Q
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3
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Blackbaud, Inc.
Consolidated statements of comprehensive income
(Unaudited)
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||||||
(dollars in thousands, except per share amounts)
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Three months ended
March 31, |
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||||
2016
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2015
|
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|||
Revenue
|
|
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||||
Subscriptions
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$
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96,851
|
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$
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72,513
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Maintenance
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37,160
|
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38,896
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Services
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32,414
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31,306
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License fees and other
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2,831
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4,278
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Total revenue
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169,256
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146,993
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Cost of revenue
|
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||||
Cost of subscriptions
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49,672
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36,178
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Cost of maintenance
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5,323
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7,502
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Cost of services
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24,319
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26,971
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Cost of license fees and other
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602
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1,161
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Total cost of revenue
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79,916
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71,812
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Gross profit
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89,340
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75,181
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Operating expenses
|
|
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||||
Sales, marketing and customer success
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35,614
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28,562
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Research and development
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22,779
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21,276
|
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General and administrative
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19,756
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16,843
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Amortization
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752
|
|
488
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Total operating expenses
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78,901
|
|
67,169
|
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Income from operations
|
10,439
|
|
8,012
|
|
||
Interest expense
|
(2,675
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)
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(1,686
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)
|
||
Other expense, net
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(105
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)
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(287
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)
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Income before provision for income taxes
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7,659
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6,039
|
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Income tax provision
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2,664
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1,754
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Net income
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$
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4,995
|
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$
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4,285
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Earnings per share
|
|
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||||
Basic
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$
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0.11
|
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$
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0.09
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Diluted
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$
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0.11
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$
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0.09
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Common shares and equivalents outstanding
|
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||||
Basic weighted average shares
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45,967,863
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45,529,668
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Diluted weighted average shares
|
46,757,458
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46,168,096
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Dividends per share
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$
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0.12
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$
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0.12
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Other comprehensive (loss) income
|
|
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||||
Foreign currency translation adjustment
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403
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(326
|
)
|
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Unrealized loss on derivative instruments, net of tax
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(669
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)
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(469
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)
|
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Total other comprehensive loss
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(266
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)
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(795
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)
|
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Comprehensive income
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$
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4,729
|
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$
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3,490
|
|
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The accompanying notes are an integral part of these consolidated financial statements.
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4
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First Quarter 2016 Form 10-Q
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First Quarter 2016 Form 10-Q
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5
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Blackbaud, Inc.
Consolidated statements of stockholders' equity
(Unaudited)
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||||||||||||||||||||
(dollars in thousands)
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Common stock
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Additional
paid-in
capital
|
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Treasury
stock
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Accumulated
other
comprehensive
loss
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Retained
earnings
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Total stockholders' equity
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||||||||
Shares
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Amount
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|||||||||||||||||
Balance at December 31, 2014
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56,048,135
|
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$
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56
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|
$
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245,674
|
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$
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(190,440
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)
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$
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(1,032
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)
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$
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131,658
|
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$
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185,916
|
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Net income
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—
|
|
—
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—
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|
—
|
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—
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|
25,649
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25,649
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||||||
Payment of dividends
|
—
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|
—
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—
|
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—
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—
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(22,508
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)
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(22,508
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)
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||||||
Exercise of stock options and stock appreciation rights and vesting of restricted stock units
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202,078
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—
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32
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—
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—
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—
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32
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||||||
Surrender of 163,017 shares upon vesting of restricted stock and restricted stock units and exercise of stock appreciation rights
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—
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—
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—
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(9,421
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)
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—
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—
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(9,421
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)
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||||||
Excess tax benefits from exercise and vesting of stock-based compensation
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—
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—
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5,466
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—
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—
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—
|
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5,466
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|
||||||
Stock-based compensation
|
—
|
|
—
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|
25,168
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—
|
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—
|
|
78
|
|
25,246
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||||||
Restricted stock grants
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736,252
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1
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—
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—
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—
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—
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1
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|
||||||
Restricted stock cancellations
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(112,648
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)
|
—
|
|
—
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—
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—
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—
|
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—
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||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
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—
|
|
207
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—
|
|
207
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|
||||||
Balance at December 31, 2015
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56,873,817
|
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$
|
57
|
|
$
|
276,340
|
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$
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(199,861
|
)
|
$
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(825
|
)
|
$
|
134,877
|
|
$
|
210,588
|
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Net income
|
—
|
|
—
|
|
—
|
|
—
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—
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|
4,995
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4,995
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|
||||||
Payment of dividends
|
—
|
|
—
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|
—
|
|
—
|
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—
|
|
(5,700
|
)
|
(5,700
|
)
|
||||||
Exercise of stock options and stock appreciation rights and vesting of restricted stock units
|
144,941
|
|
—
|
|
3
|
|
—
|
|
—
|
|
—
|
|
3
|
|
||||||
Surrender of 104,644 shares upon vesting of restricted stock and restricted stock units and exercise of stock appreciation rights
|
—
|
|
—
|
|
—
|
|
(5,516
|
)
|
—
|
|
—
|
|
(5,516
|
)
|
||||||
Excess tax benefits from exercise and vesting of stock-based compensation
|
—
|
|
—
|
|
1,137
|
|
—
|
|
—
|
|
—
|
|
1,137
|
|
||||||
Stock-based compensation
|
—
|
|
—
|
|
7,896
|
|
—
|
|
—
|
|
20
|
|
7,916
|
|
||||||
Restricted stock grants
|
497,456
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Restricted stock cancellations
|
(19,655
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Other comprehensive loss
|
—
|
|
—
|
|
—
|
|
—
|
|
(266
|
)
|
—
|
|
(266
|
)
|
||||||
Balance at March 31, 2016
|
57,496,559
|
|
$
|
57
|
|
$
|
285,376
|
|
$
|
(205,377
|
)
|
$
|
(1,091
|
)
|
$
|
134,192
|
|
$
|
213,157
|
|
|
|
|
|
|
|
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|||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
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6
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Third Quarter 2015 Form 10-Q
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1. Organization
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2. Summary of Significant Accounting Policies
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First Quarter 2016 Form 10-Q
|
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7
|
8
|
|
First Quarter 2016 Form 10-Q
|
First Quarter 2016 Form 10-Q
|
|
9
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•
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Level 1 - Quoted prices for identical assets or liabilities in active markets;
|
•
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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.
|
10
|
|
First Quarter 2016 Form 10-Q
|
First Quarter 2016 Form 10-Q
|
|
11
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3. Business Combinations
|
(dollars in thousands)
|
Purchase Price Allocation
|
|
|
Net working capital, excluding deferred revenue
|
$
|
510
|
|
Property and equipment
|
2,457
|
|
|
Deferred revenue
|
(6,500
|
)
|
|
Deferred tax asset
|
2,637
|
|
|
Intangible assets
|
97,800
|
|
|
Goodwill
|
90,068
|
|
|
Total purchase price
(1)
|
$
|
186,972
|
|
12
|
|
First Quarter 2016 Form 10-Q
|
|
Intangible
assets
acquired
|
|
Weighted
average amortization period
|
|
|
(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
|
|
Three months ended
March 31, |
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(dollars in thousands, except per share amounts)
|
2015
|
|
|
Revenue
|
$
|
155,812
|
|
Net income
|
$
|
4,439
|
|
Basic earnings per share
|
$
|
0.10
|
|
Diluted earnings per share
|
$
|
0.10
|
|
First Quarter 2016 Form 10-Q
|
|
13
|
4. Earnings Per Share
|
|
Three months ended
March 31, |
|
||||
(dollars in thousands, except per share amounts)
|
2016
|
|
2015
|
|
||
Numerator:
|
|
|
||||
Net income
|
$
|
4,995
|
|
$
|
4,285
|
|
Denominator:
|
|
|
||||
Weighted average common shares
|
45,967,863
|
|
45,529,668
|
|
||
Add effect of dilutive securities:
|
|
|
||||
Stock-based compensation
|
789,595
|
|
638,428
|
|
||
Weighted average common shares assuming dilution
|
46,757,458
|
|
46,168,096
|
|
||
Earnings per share:
|
|
|
||||
Basic
|
$
|
0.11
|
|
$
|
0.09
|
|
Diluted
|
$
|
0.11
|
|
$
|
0.09
|
|
|
Three months ended
March 31, |
|
||
|
2016
|
|
2015
|
|
Shares excluded from calculations of diluted earnings per share
|
55,844
|
|
18,575
|
|
14
|
|
First Quarter 2016 Form 10-Q
|
5. Fair Value Measurements
|
|
Fair value measurement using
|
|
|
||||||||||||
(dollars in thousands)
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
||||
Fair value as of March 31, 2016
|
|
|
|
|
|
|
|
||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative instruments
(1)
|
$
|
—
|
|
|
$
|
1,135
|
|
|
$
|
—
|
|
|
$
|
1,135
|
|
Total financial liabilities
|
$
|
—
|
|
|
$
|
1,135
|
|
|
$
|
—
|
|
|
$
|
1,135
|
|
|
|
|
|
|
|
|
|
||||||||
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
|
|
(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.
|
First Quarter 2016 Form 10-Q
|
|
15
|
6. Goodwill and Other Intangible Assets
|
(dollars in thousands)
|
ECBU
|
GMBU
|
IBU
|
Total
|
||||||||
Balance at December 31, 2015
|
$
|
240,494
|
|
$
|
190,976
|
|
$
|
4,979
|
|
$
|
436,449
|
|
Adjustments related to prior year business combinations
(1)
|
—
|
|
(490
|
)
|
—
|
|
(490
|
)
|
||||
Effect of foreign currency translation
|
—
|
|
—
|
|
35
|
|
35
|
|
||||
Balance at March 31, 2016
|
$
|
240,494
|
|
$
|
190,486
|
|
$
|
5,014
|
|
$
|
435,994
|
|
(1)
|
See
Note 3
to these consolidated financial statements for details of the immaterial measurement period adjustment.
|
|
Three months ended
March 31, |
|
||||
(dollars in thousands)
|
2016
|
|
2015
|
|
||
Included in cost of revenue:
|
|
|
||||
Cost of subscriptions
|
$
|
7,811
|
|
$
|
5,772
|
|
Cost of maintenance
|
1,332
|
|
1,153
|
|
||
Cost of services
|
653
|
|
607
|
|
||
Cost of license fees and other
|
85
|
|
107
|
|
||
Total included in cost of revenue
|
9,881
|
|
7,639
|
|
||
Included in operating expenses
|
752
|
|
488
|
|
||
Total amortization of intangibles from business combinations
|
$
|
10,633
|
|
$
|
8,127
|
|
16
|
|
First Quarter 2016 Form 10-Q
|
7. Consolidated Financial Statement Details
|
(dollars in thousands)
|
March 31,
2016 |
|
December 31,
2015 |
|
||
Deferred sales commissions
|
$
|
29,938
|
|
$
|
30,141
|
|
Prepaid software maintenance
|
14,443
|
|
15,308
|
|
||
Deferred professional services costs
|
3,060
|
|
3,603
|
|
||
Taxes, prepaid and receivable
|
8,439
|
|
9,121
|
|
||
Deferred tax asset
|
3,325
|
|
2,869
|
|
||
Prepaid royalties
|
1,471
|
|
1,767
|
|
||
Other assets
|
7,966
|
|
6,758
|
|
||
Total prepaid expenses and other assets
|
68,642
|
|
69,567
|
|
||
Less: Long-term portion
|
20,207
|
|
20,901
|
|
||
Prepaid expenses and other current assets
|
$
|
48,435
|
|
$
|
48,666
|
|
(dollars in thousands)
|
March 31,
2016 |
|
December 31,
2015 |
|
||
Accrued bonuses
|
$
|
8,221
|
|
$
|
24,591
|
|
Accrued commissions and salaries
|
4,760
|
|
8,391
|
|
||
Taxes payable
|
3,502
|
|
3,923
|
|
||
Deferred rent liabilities
|
3,905
|
|
4,070
|
|
||
Lease incentive obligations
|
4,514
|
|
4,734
|
|
||
Unrecognized tax benefit
|
3,197
|
|
3,147
|
|
||
Customer credit balances
|
3,298
|
|
3,515
|
|
||
Accrued vacation costs
|
2,221
|
|
2,446
|
|
||
Accrued health care costs
|
3,491
|
|
2,356
|
|
||
Other liabilities
|
8,468
|
|
7,911
|
|
||
Total accrued expenses and other liabilities
|
45,577
|
|
65,084
|
|
||
Less: Long-term portion
|
8,000
|
|
7,623
|
|
||
Accrued expenses and other current liabilities
|
$
|
37,577
|
|
$
|
57,461
|
|
(dollars in thousands)
|
March 31,
2016 |
|
December 31,
2015 |
|
||
Subscriptions
|
$
|
122,238
|
|
$
|
122,524
|
|
Maintenance
|
78,204
|
|
85,901
|
|
||
Services
|
27,866
|
|
28,517
|
|
||
License fees and other
|
690
|
|
393
|
|
||
Total deferred revenue
|
228,998
|
|
237,335
|
|
||
Less: Long-term portion
|
6,583
|
|
7,119
|
|
||
Deferred revenue, current portion
|
$
|
222,415
|
|
$
|
230,216
|
|
First Quarter 2016 Form 10-Q
|
|
17
|
|
Three months ended
March 31, |
|
||||
(dollars in thousands)
|
2016
|
|
2015
|
|
||
Interest income
|
$
|
121
|
|
$
|
8
|
|
Other expense, net
|
(226
|
)
|
(295
|
)
|
||
Other expense, net
|
$
|
(105
|
)
|
$
|
(287
|
)
|
8. Debt
|
|
Debt balance at
|
|
|
Weighted average
effective interest rate at
|
|
||||||
(dollars in thousands)
|
March 31,
2016 |
|
December 31,
2015 |
|
|
March 31,
2016 |
|
December 31,
2015 |
|
||
Credit facility:
|
|
|
|
|
|
||||||
Revolving credit loans
|
$
|
258,100
|
|
$
|
242,900
|
|
|
2.16
|
%
|
2.15
|
%
|
Term loans
|
166,250
|
|
167,344
|
|
|
2.52
|
%
|
2.51
|
%
|
||
Total debt
|
424,350
|
|
410,244
|
|
|
2.30
|
%
|
2.30
|
%
|
||
Less: Unamortized debt discount
|
1,986
|
|
2,157
|
|
|
|
|
||||
Less: Debt, current portion
|
4,375
|
|
4,375
|
|
|
2.13
|
%
|
2.11
|
%
|
||
Debt, net of current portion
|
$
|
417,989
|
|
$
|
403,712
|
|
|
2.31
|
%
|
2.30
|
%
|
18
|
|
First Quarter 2016 Form 10-Q
|
Years ending December 31,
(dollars in thousands)
|
Annual maturities
|
|
|
2016 - remaining
|
$
|
3,281
|
|
2017
|
4,375
|
|
|
2018
|
4,375
|
|
|
2019
|
412,319
|
|
|
2020
|
—
|
|
|
Thereafter
|
—
|
|
|
Total required maturities
|
$
|
424,350
|
|
9. Derivative Instruments
|
First Quarter 2016 Form 10-Q
|
|
19
|
(dollars in thousands)
|
Balance sheet location
|
March 31,
2016 |
|
December 31,
2015 |
|
||
Derivative instruments designated as hedging instruments:
|
|
|
|
||||
Interest rate swap, long-term portion
|
Other assets
|
$
|
—
|
|
$
|
406
|
|
Total derivative instruments designated as hedging instruments
|
|
$
|
—
|
|
$
|
406
|
|
|
|
March 31,
2016 |
|
December 31,
2015 |
|
||
Derivative instruments designated as hedging instruments:
|
|
|
|
||||
Interest rate swaps, current portion
|
Accrued expenses and
other current liabilities
|
$
|
15
|
|
$
|
2
|
|
Interest rate swaps, long-term portion
|
Other liabilities
|
1,120
|
|
436
|
|
||
Total derivative instruments designated as hedging instruments
|
|
$
|
1,135
|
|
$
|
438
|
|
|
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
|
|
||
(dollars in thousands)
|
March 31,
2016 |
|
Three months ended
March 31, 2016 |
|
|||
Interest rate swaps
|
$
|
(1,135
|
)
|
Interest expense
|
$
|
(308
|
)
|
|
|
|
|
||||
|
March 31,
2015 |
|
|
Three months ended
March 31, 2015 |
|
||
Interest rate swaps
|
$
|
(1,030
|
)
|
Interest expense
|
$
|
(375
|
)
|
20
|
|
First Quarter 2016 Form 10-Q
|
10. Commitments and Contingencies
|
Years ending December 31,
(dollars in thousands)
|
Operating leases
|
|
|
2016 – remaining
|
$
|
10,320
|
|
2017
|
12,171
|
|
|
2018
|
11,935
|
|
|
2019
|
12,366
|
|
|
2020
|
11,637
|
|
|
Thereafter
|
32,076
|
|
|
Total minimum lease payments
|
$
|
90,505
|
|
First Quarter 2016 Form 10-Q
|
|
21
|
11. Income Taxes
|
|
Three months ended
March 31, |
|
||||
(dollars in thousands)
|
2016
|
|
2015
|
|
||
Income tax provision
|
$
|
2,664
|
|
$
|
1,754
|
|
Effective income tax rate
|
34.8
|
%
|
29.0
|
%
|
22
|
|
First Quarter 2016 Form 10-Q
|
12. Stock-based Compensation
|
|
Three months ended
March 31, |
|
||||
(dollars in thousands)
|
2016
|
|
2015
|
|
||
Included in cost of revenue:
|
|
|
||||
Cost of subscriptions
|
$
|
281
|
|
$
|
143
|
|
Cost of maintenance
|
123
|
|
161
|
|
||
Cost of services
|
468
|
|
597
|
|
||
Total included in cost of revenue
|
872
|
|
901
|
|
||
Included in operating expenses:
|
|
|
||||
Sales, marketing and customer success
|
901
|
|
701
|
|
||
Research and development
|
1,535
|
|
978
|
|
||
General and administrative
|
4,608
|
|
2,522
|
|
||
Total included in operating expenses
|
7,044
|
|
4,201
|
|
||
Total stock-based compensation expense
|
$
|
7,916
|
|
$
|
5,102
|
|
13. Stockholders' Equity
|
Declaration Date
|
Dividend
per Share
|
|
Record Date
|
|
Payable Date
|
|
February 2016
|
$
|
0.12
|
|
February 26
|
|
March 15
|
First Quarter 2016 Form 10-Q
|
|
23
|
|
Three months ended
March 31, |
|
||||
(dollars in thousands)
|
2016
|
|
2015
|
|
||
Accumulated other comprehensive loss, beginning of period
|
$
|
(825
|
)
|
$
|
(1,032
|
)
|
By component:
|
|
|
||||
Gains and losses on cash flow hedges:
|
|
|
||||
Accumulated other comprehensive loss balance, beginning of period
|
$
|
(19
|
)
|
$
|
(164
|
)
|
Other comprehensive loss before reclassifications, net of tax effects of $555 and $439
|
(856
|
)
|
(698
|
)
|
||
Amounts reclassified from accumulated other comprehensive loss to interest expense
|
308
|
|
375
|
|
||
Tax benefit included in provision for income taxes
|
(121
|
)
|
(146
|
)
|
||
Total amounts reclassified from accumulated other comprehensive loss
|
187
|
|
229
|
|
||
Net current-period other comprehensive loss
|
(669
|
)
|
(469
|
)
|
||
Accumulated other comprehensive loss balance, end of period
|
$
|
(688
|
)
|
$
|
(633
|
)
|
Foreign currency translation adjustment:
|
|
|
||||
Accumulated other comprehensive loss balance, beginning of period
|
$
|
(806
|
)
|
$
|
(868
|
)
|
Translation adjustments
|
403
|
|
(326
|
)
|
||
Accumulated other comprehensive loss balance, end of period
|
(403
|
)
|
(1,194
|
)
|
||
Accumulated other comprehensive loss, end of period
|
$
|
(1,091
|
)
|
$
|
(1,827
|
)
|
14. Segment Information
|
•
|
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.
|
24
|
|
First Quarter 2016 Form 10-Q
|
|
Three months ended
March 31, |
|
||||
(dollars in thousands)
|
2016
|
|
2015
|
|
||
Revenue by segment:
|
|
|
||||
GMBU
|
$
|
87,952
|
|
$
|
69,929
|
|
ECBU
|
71,499
|
|
66,914
|
|
||
IBU
|
9,758
|
|
10,127
|
|
||
Other
(1)
|
47
|
|
23
|
|
||
Total revenue
|
$
|
169,256
|
|
$
|
146,993
|
|
Segment operating income
(2)
:
|
|
|
||||
GMBU
|
$
|
42,611
|
|
$
|
34,663
|
|
ECBU
|
35,766
|
|
32,204
|
|
||
IBU
|
996
|
|
1,301
|
|
||
Other
(1)
|
30
|
|
(312
|
)
|
||
|
79,403
|
|
67,856
|
|
||
Less:
|
|
|
||||
Corporate unallocated costs
(3)
|
(50,415
|
)
|
(46,615
|
)
|
||
Stock based compensation costs
|
(7,916
|
)
|
(5,102
|
)
|
||
Amortization expense
|
(10,633
|
)
|
(8,127
|
)
|
||
Interest expense
|
(2,675
|
)
|
(1,686
|
)
|
||
Other expense, net
|
(105
|
)
|
(287
|
)
|
||
Income before provision for income taxes
|
$
|
7,659
|
|
$
|
6,039
|
|
(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.
|
First Quarter 2016 Form 10-Q
|
|
25
|
Executive Summary
|
1.
|
Integrated and Open Solutions in the Cloud
|
2.
|
Drive Sales Effectiveness
|
26
|
|
First Quarter 2016 Form 10-Q
|
3.
|
Expand TAM into Near Adjacencies with Acquisitions;
|
4.
|
Streamline Operations
|
5.
|
Execute our 3-Year Margin Improvement Plan
|
Total revenue
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||
(dollars in millions)
|
2016
(1)
|
|
2015
|
|
Change
|
|
||
Total revenue
|
$
|
169.3
|
|
$
|
147.0
|
|
15.2
|
%
|
(1)
|
Included in total revenue for the
three months ended
March 31, 2016
was
$9.2 million
attributable to the inclusion of Smart Tuition.
|
First Quarter 2016 Form 10-Q
|
|
27
|
Income from operations
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||
(dollars in millions)
|
2016
|
|
2015
|
|
Change
|
|
||
Income from operations
|
$
|
10.4
|
|
$
|
8.0
|
|
30.0
|
%
|
(1)
|
Included in income from operations for the
three months ended
March 31, 2016
was
$1.2 million
attributable to the inclusion of Smart Tuition.
|
28
|
|
First Quarter 2016 Form 10-Q
|
Results of Operations
|
Revenue by segment
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||
(dollars in millions)
|
2016
(1)
|
|
2015
|
|
Change
|
|
||
GMBU
|
$
|
88.0
|
|
$
|
69.9
|
|
25.9
|
%
|
ECBU
|
71.5
|
|
66.9
|
|
6.9
|
%
|
||
IBU
|
9.8
|
|
10.1
|
|
(3.0
|
)%
|
||
Total revenue
(2)
|
$
|
169.3
|
|
$
|
147.0
|
|
15.2
|
%
|
(1)
|
Included in GMBU revenue and total revenue for the
three months ended
March 31, 2016
was
$9.2 million
attributable to the inclusion of Smart Tuition.
|
(2)
|
The individual amounts for each year may not sum to total revenue due to rounding.
|
First Quarter 2016 Form 10-Q
|
|
29
|
GMBU
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||
(dollars in millions)
|
2016
|
|
2015
|
|
Change
|
|
||
GMBU revenue
|
$
|
88.0
|
|
$
|
69.9
|
|
25.9
|
%
|
% of total revenue
|
52.0
|
%
|
47.6
|
%
|
|
(1)
|
Included in GMBU revenue for the
three months ended
March 31, 2016
was
$9.2 million
attributable to the inclusion of Smart Tuition.
|
ECBU
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||
(dollars in millions)
|
2016
|
|
2015
|
|
Change
|
|
||
ECBU revenue
|
$
|
71.5
|
|
$
|
66.9
|
|
6.9
|
%
|
% of total revenue
|
42.2
|
%
|
45.5
|
%
|
|
IBU
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||
(dollars in millions)
|
2016
|
|
2015
|
|
Change
|
|
||
IBU revenue
|
$
|
9.8
|
|
$
|
10.1
|
|
(3.0
|
)%
|
% of total revenue
|
5.8
|
%
|
6.9
|
%
|
|
30
|
|
First Quarter 2016 Form 10-Q
|
Subscriptions
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||
(dollars in millions)
|
2016
(1)
|
|
2015
|
|
Change
|
|
||
Subscriptions revenue
|
$
|
96.9
|
|
$
|
72.5
|
|
33.7
|
%
|
Cost of subscriptions
|
49.7
|
|
36.2
|
|
37.3
|
%
|
||
Subscriptions gross profit
|
$
|
47.2
|
|
$
|
36.3
|
|
30.0
|
%
|
Subscriptions gross margin
|
48.7
|
%
|
50.1
|
%
|
|
(1)
|
Included in subscriptions revenue and cost of subscriptions for the
three months ended
March 31, 2016
was $9.0 million and $4.9 million, respectively, attributable to the inclusion of Smart Tuition.
|
First Quarter 2016 Form 10-Q
|
|
31
|
Maintenance
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||
(dollars in millions)
|
2016
|
|
2015
|
|
Change
|
|
||
Maintenance revenue
|
$
|
37.2
|
|
$
|
38.9
|
|
(4.4
|
)%
|
Cost of maintenance
|
5.3
|
|
7.5
|
|
(29.3
|
)%
|
||
Maintenance gross profit
|
$
|
31.9
|
|
$
|
31.4
|
|
1.6
|
%
|
Maintenance gross margin
|
85.7
|
%
|
80.7
|
%
|
|
32
|
|
First Quarter 2016 Form 10-Q
|
Services
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||
(dollars in millions)
|
2016
(1)
|
|
2015
|
|
Change
|
|
||
Services revenue
|
$
|
32.4
|
|
$
|
31.3
|
|
3.5
|
%
|
Cost of services
|
24.3
|
|
27.0
|
|
(10.0
|
)%
|
||
Services gross profit
|
$
|
8.1
|
|
$
|
4.3
|
|
88.4
|
%
|
Services gross margin
|
25.0
|
%
|
13.8
|
%
|
|
(1)
|
Included in services revenue and cost of services for the
three months ended
March 31, 2016
were insignificant amounts attributable to the inclusion of Smart Tuition.
|
First Quarter 2016 Form 10-Q
|
|
33
|
License fees and other
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||
(dollars in millions)
|
2016
|
|
2015
|
|
Change
|
|
||
License fees and other revenue
|
$
|
2.8
|
|
$
|
4.3
|
|
(34.9
|
)%
|
Cost of license fees and other
|
0.6
|
|
1.2
|
|
(50.0
|
)%
|
||
License fees and other gross profit
|
$
|
2.2
|
|
$
|
3.1
|
|
(29.0
|
)%
|
License fees and other gross margin
|
78.7
|
%
|
72.9
|
%
|
|
34
|
|
First Quarter 2016 Form 10-Q
|
Sales, marketing, and customer success
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||
(dollars in millions)
|
2016
|
|
2015
|
|
Change
|
|
||
Sales, marketing and customer success expense
|
$
|
35.6
|
|
$
|
28.6
|
|
24.5
|
%
|
% of total revenue
|
21.0
|
%
|
19.4
|
%
|
|
Research and development
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||
(dollars in millions)
|
2016
|
|
2015
|
|
Change
|
|
||
Research and development expense
|
$
|
22.8
|
|
$
|
21.3
|
|
7.0
|
%
|
% of total revenue
|
13.5
|
%
|
14.5
|
%
|
|
First Quarter 2016 Form 10-Q
|
|
35
|
General and administrative
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||
(dollars in millions)
|
2016
|
|
2015
|
|
Change
|
|
||
General and administrative expense
|
$
|
19.8
|
|
$
|
16.8
|
|
17.9
|
%
|
% of total revenue
|
11.7
|
%
|
11.5
|
%
|
|
Interest expense
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||
(dollars in millions)
|
2016
|
|
2015
|
|
Change
|
|
||
Interest expense
|
$
|
2.7
|
|
$
|
1.7
|
|
58.8
|
%
|
% of total revenue
|
1.6
|
%
|
1.1
|
%
|
|
36
|
|
First Quarter 2016 Form 10-Q
|
(dollars in millions)
|
Timing of recognition
|
March 31,
2016 |
|
Change
|
|
|
December 31,
2015 |
|
||
Subscriptions
|
Over the period billed in advance, generally one year
|
$
|
122.2
|
|
(0.2
|
)%
|
|
$
|
122.5
|
|
Maintenance
|
Over the period billed in advance, generally one year
|
78.2
|
|
(9.0
|
)%
|
|
85.9
|
|
||
Services
|
As services are delivered
|
27.9
|
|
(2.1
|
)%
|
|
28.5
|
|
||
License fees and other
|
Upon delivery of the solution or service
|
0.7
|
|
75.0
|
%
|
|
0.4
|
|
||
Total deferred revenue
(1)
|
|
229.0
|
|
(3.5
|
)%
|
|
237.3
|
|
||
Less: Long-term portion
|
|
6.6
|
|
(7.0
|
)%
|
|
7.1
|
|
||
Current portion
(1)
|
|
$
|
222.4
|
|
(3.4
|
)%
|
|
$
|
230.2
|
|
(1)
|
The individual amounts for each year may not sum to total deferred revenue or current portion of deferred revenue due to rounding.
|
Income tax provision
|
|
|
|
|||||
|
Three months ended March 31,
|
|||||||
(dollars in millions)
|
2016
|
|
2015
|
|
Change
|
|
||
Income tax provision
|
$
|
2.7
|
|
$
|
1.8
|
|
50.0
|
%
|
Effective income tax rate
|
34.8
|
%
|
29.0
|
%
|
|
First Quarter 2016 Form 10-Q
|
|
37
|
|
Three months ended March 31,
|
|||||||
(dollars in millions)
|
2016
|
|
2015
|
|
Change
|
|
||
GAAP Revenue
|
$
|
169.3
|
|
$
|
147.0
|
|
15.2
|
%
|
Non-GAAP adjustments:
|
|
|
|
|||||
Add: Acquisition-related deferred revenue write-down
|
1.8
|
|
3.5
|
|
(48.6
|
)%
|
||
Non-GAAP revenue
(1)
|
$
|
171.0
|
|
$
|
150.5
|
|
13.6
|
%
|
|
|
|
|
|||||
GAAP gross profit
|
$
|
89.3
|
|
$
|
75.2
|
|
18.8
|
%
|
GAAP gross margin
|
52.8
|
%
|
51.1
|
%
|
|
|||
Non-GAAP adjustments:
|
|
|
|
|||||
Add: Acquisition-related deferred revenue write-down
|
1.8
|
|
3.5
|
|
(48.6
|
)%
|
||
Add: Stock-based compensation expense
|
0.9
|
|
0.9
|
|
—
|
%
|
||
Add: Amortization of intangibles from business combinations
|
9.9
|
|
7.6
|
|
30.3
|
%
|
||
Add: Employee severance
|
0.1
|
|
0.6
|
|
(83.3
|
)%
|
||
Subtotal
(1)
|
12.6
|
|
12.7
|
|
(0.8
|
)%
|
||
Non-GAAP gross profit
(1)
|
$
|
101.9
|
|
$
|
87.8
|
|
16.1
|
%
|
Non-GAAP gross margin
|
59.6
|
%
|
58.4
|
%
|
|
(1)
|
The individual amounts for each year may not sum to non-GAAP revenue, subtotal or non-GAAP gross profit due to rounding.
|
38
|
|
First Quarter 2016 Form 10-Q
|
|
Three months ended March 31,
|
|||||||
(dollars in millions, except per share amounts)
|
2016
|
|
2015
|
|
Change
|
|
||
GAAP income from operations
|
$
|
10.4
|
|
$
|
8.0
|
|
30.0
|
%
|
GAAP operating margin
|
6.2
|
%
|
5.5
|
%
|
|
|||
Non-GAAP adjustments:
|
|
|
|
|||||
Add: Acquisition-related deferred revenue write-down
|
1.8
|
|
3.5
|
|
(48.6
|
)%
|
||
Add: Stock-based compensation expense
|
7.9
|
|
5.1
|
|
54.9
|
%
|
||
Add: Amortization of intangibles from business combinations
|
10.6
|
|
8.1
|
|
30.9
|
%
|
||
Add: Employee severance
|
0.3
|
|
1.1
|
|
(72.7
|
)%
|
||
Add: Acquisition-related integration costs
|
0.4
|
|
0.5
|
|
(20.0
|
)%
|
||
Add: Acquisition-related expenses
|
0.1
|
|
0.1
|
|
—
|
%
|
||
Subtotal
(1)
|
21.1
|
|
18.4
|
|
14.7
|
%
|
||
Non-GAAP income from operations
(1)
|
$
|
31.6
|
|
$
|
26.5
|
|
19.2
|
%
|
Non-GAAP operating margin
|
18.5
|
%
|
17.6
|
%
|
|
|||
|
|
|
|
|||||
GAAP net income
|
$
|
5.0
|
|
$
|
4.3
|
|
16.3
|
%
|
Shares used in computing GAAP diluted earnings per share
|
46,757,458
|
|
46,168,096
|
|
1.3
|
%
|
||
GAAP diluted earnings per share
|
$
|
0.11
|
|
$
|
0.09
|
|
22.2
|
%
|
Non-GAAP adjustments:
|
|
|
|
|||||
Add: Total Non-GAAP adjustments affecting loss from operations
|
21.1
|
|
18.4
|
|
14.7
|
%
|
||
Less: Tax impact related to Non-GAAP adjustments
|
(6.5
|
)
|
(7.8
|
)
|
(16.7
|
)%
|
||
Non-GAAP net income
(1)
|
$
|
19.6
|
|
$
|
14.9
|
|
31.5
|
%
|
|
|
|
|
|||||
Shares used in computing Non-GAAP diluted earnings per share
|
46,757,458
|
|
46,168,096
|
|
1.3
|
%
|
||
Non-GAAP diluted earnings per share
|
$
|
0.42
|
|
$
|
0.32
|
|
31.3
|
%
|
(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.
|
First Quarter 2016 Form 10-Q
|
|
39
|
(dollars in millions)
|
Three months ended March 31,
|
|
||||
2016
|
|
2015
|
|
|||
GAAP revenue
|
$
|
169.3
|
|
$
|
147.0
|
|
GAAP revenue growth
|
15.1
|
%
|
|
|||
Add: Non-GAAP acquisition-related revenue
(1)
|
1.8
|
|
12.3
|
|
||
Less: Revenue from divested businesses
(2)
|
—
|
|
(0.4
|
)
|
||
Total Non-GAAP adjustments
|
1.8
|
|
11.9
|
|
||
Non-GAAP revenue
|
$
|
171.0
|
|
$
|
158.9
|
|
Non-GAAP organic revenue growth
|
7.6
|
%
|
|
|||
|
|
|
||||
Non-GAAP revenue
(3)
|
$
|
171.0
|
|
$
|
158.9
|
|
Foreign currency impact on Non-GAAP organic revenue
(4)
|
1.5
|
|
—
|
|
||
Non-GAAP revenue on constant currency basis
(4)
|
$
|
172.6
|
|
$
|
158.9
|
|
Non-GAAP organic revenue growth on constant currency basis
|
8.6
|
%
|
|
|||
|
|
|
||||
GAAP subscriptions revenue
|
$
|
96.9
|
|
$
|
72.5
|
|
GAAP maintenance revenue
|
37.2
|
|
38.9
|
|
||
GAAP recurring revenue
|
134.0
|
|
111.4
|
|
||
GAAP recurring revenue growth
|
20.3
|
%
|
|
|||
Add: Non-GAAP acquisition-related revenue
(1)
|
1.8
|
|
11.9
|
|
||
Less: Revenue from divested businesses
(2)
|
—
|
|
(0.2
|
)
|
||
Total Non-GAAP adjustments
|
1.8
|
|
11.7
|
|
||
Non-GAAP recurring revenue
|
$
|
135.8
|
|
$
|
123.1
|
|
Non-GAAP organic recurring revenue growth
|
10.3
|
%
|
|
(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 non-GAAP revenue from the acquisition-related deferred revenue write-down attributable to those companies.
|
(2)
|
For businesses divested in the prior fiscal year, non-GAAP organic revenue growth excludes revenue associated with divested businesses. 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 may 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.
|
40
|
|
First Quarter 2016 Form 10-Q
|
Liquidity and Capital Resources
|
(dollars in millions)
|
March 31,
2016 |
|
Change
|
|
|
December 31,
2015 |
|
||
Cash and cash equivalents
|
$
|
12.1
|
|
(21.4
|
)%
|
|
$
|
15.4
|
|
Property and equipment, net
|
54.5
|
|
3.4
|
%
|
|
52.7
|
|
||
Software development costs, net
|
23.0
|
|
17.3
|
%
|
|
19.6
|
|
||
Total carrying value of debt
|
422.4
|
|
3.5
|
%
|
|
408.1
|
|
||
Working capital
|
(143.7
|
)
|
(14.1
|
)%
|
|
(167.2
|
)
|
||
Working capital excluding deferred revenue
|
78.7
|
|
24.9
|
%
|
|
63.0
|
|
|
Three months ended March 31,
|
||||||||
(dollars in millions)
|
2016
|
|
Change
|
|
|
2015
|
|
||
Net cash provided by operating activities
|
$
|
0.1
|
|
(97.6
|
)%
|
|
$
|
4.2
|
|
Net cash used in investing activities
|
(13.6
|
)
|
138.6
|
%
|
|
(5.7
|
)
|
||
Net cash provided by financing activities
|
9.5
|
|
9,400.0
|
%
|
|
0.1
|
|
First Quarter 2016 Form 10-Q
|
|
41
|
•
|
an increase in current period bonus payments as a result of an increase in amounts accrued as of December 31, 2015 for over-performance against 2015 targets;
|
•
|
an increase in tax payments on behalf of employees for surrendered shares upon vesting of equity awards;
|
•
|
the timing of vendor payments; and to a lesser extent
|
•
|
a seasonal decrease in customer billings due to the timing of customer contract renewals.
|
42
|
|
First Quarter 2016 Form 10-Q
|
Financial Covenant
|
Requirement
|
Ratio as of March 31, 2016
|
Net Leverage Ratio
|
≤ 3.50 to 1.00
|
2.77 to 1.00
|
Interest Coverage Ratio
|
≥ 2.50 to 1.00
|
16.41 to 1.00
|
|
Payments due by period
|
||||||||||||||
(in millions)
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
|
|||||
Recorded contractual obligations:
|
|
|
|
|
|
||||||||||
Debt
(1)
|
$
|
424.4
|
|
$
|
4.4
|
|
$
|
420.0
|
|
$
|
—
|
|
$
|
—
|
|
Interest payments on debt
(2)
|
1.2
|
|
0.9
|
|
0.3
|
|
—
|
|
—
|
|
|||||
|
|
|
|
|
|
||||||||||
Unrecorded contractual obligations:
|
|
|
|
|
|
||||||||||
Operating leases
(3)
|
97.7
|
|
15.0
|
|
26.9
|
|
25.0
|
|
30.8
|
|
|||||
Interest payments on debt
(4)
|
26.0
|
|
8.9
|
|
17.1
|
|
—
|
|
—
|
|
|||||
Purchase obligations
(5)
|
15.5
|
|
7.7
|
|
5.7
|
|
2.1
|
|
|
||||||
Total contractual obligations
|
$
|
564.8
|
|
$
|
36.9
|
|
$
|
470.0
|
|
$
|
27.1
|
|
$
|
30.8
|
|
(1)
|
Represents principal payments only, under the following assumptions: (i) that the amounts outstanding under the 2014 Credit Facility at
March 31, 2016
will remain outstanding until maturity, with minimum payments occurring as currently scheduled, and (ii) that there are no assumed future borrowings on the 2014 Revolving 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 obligations varying in length from
one
to
four
years. In certain cases, these arrangements require a minimum annual purchase commitment by us.
|
First Quarter 2016 Form 10-Q
|
|
43
|
Off-Balance Sheet Arrangements
|
Foreign Currency Exchange Rates
|
Inflation
|
Critical Accounting Policies and Estimates
|
44
|
|
First Quarter 2016 Form 10-Q
|
Recently Issued Accounting Pronouncements
|
Interest Rate Risk
|
Foreign Currency Risk
|
Evaluation of Disclosure Controls and Procedures
|
Changes in Internal Control Over Financial Reporting
|
First Quarter 2016 Form 10-Q
|
|
45
|
|
|
PART II. OTHER INFORMATION
|
Issuer Purchases of Equity Securities
|
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, January 1, 2016
|
|
|
|
|
|
|
$
|
50,000
|
|
||||
January 1, 2016 through January 31, 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
50,000
|
|
|
February 1, 2016 through February 29, 2016
|
104,970
|
|
|
52.72
|
|
|
—
|
|
|
50,000
|
|
||
March 1, 2016 through March 31, 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
50,000
|
|
||
Total
|
104,970
|
|
|
$
|
52.72
|
|
|
—
|
|
|
$
|
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.
|
46
|
|
First Quarter 2016 Form 10-Q
|
|
|
|
|
Filed In
|
||||||
Exhibit Number
|
|
Description of Document
|
|
Filed Herewith
|
|
Form
|
|
Exhibit Number
|
|
Filing Date
|
10.82
|
|
Offer Letter Agreement between Blackbaud, Inc. and Brian E. Boruff
|
|
X
|
|
|
|
|
|
|
10.83
|
|
Employee Agreement between Blackbaud, Inc. and Brian E. Boruff
|
|
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
|
|
|
|
|
|
|
First Quarter 2016 Form 10-Q
|
|
47
|
|
|
SIGNATURES
|
|
|
BLACKBAUD, INC.
|
|
|
|
|
|
Date:
|
May 4, 2016
|
By:
|
/s/ Michael P. Gianoni
|
|
|
|
Michael P. Gianoni
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date:
|
May 4, 2016
|
By:
|
/s/ Anthony W. Boor
|
|
|
|
Anthony W. Boor
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
48
|
|
First Quarter 2016 Form 10-Q
|
▪
|
Base salary of $410,000 annually which will be paid on a semi-monthly basis.
|
▪
|
You are eligible to participate in the 2015 Corporate Incentive Plan with a target bonus opportunity of 65
%
of your earned salary. Participation in the plan is subject to the terms and conditions outlined in the plan document. This is an annual plan and upon your arrival specifics of the bonus plan will be communicated to you. Your participation will be pro-rated in 2015.
|
▪
|
You will receive an initial stock grant in the amount of $1,000,000 granted in the next open window following your start date. The grant will consist of 50% Restricted Shares that will vest equally over 4 years and 50% performance based RSUs. Details on the performance based RSUs will be provided to you along with the grant notice. The amount of the shares and RSUs will be determined by dividing the $1,000,000 by the 30-day average price of Blackbaud stock. A copy of the Blackbaud Equity Plan will also be provided to you.
|
▪
|
You will receive a sign-on bonus in the amount of $50,000. This bonus, which will be paid on your first paycheck, is subject to all normal payroll taxes and will require that you sign the enclosed repayment agreement in the event you leave Blackbaud within the first year.
|
▪
|
Blackbaud will cover the cost of the move of household goods, through our selected vendor from your Myrtle Beach, SC home to Charleston, South Carolina up to $12,000. It is important to note that your relocation benefits will expire 1 year from your date of hire. We require that you sign the repayment agreement in the event you leave Blackbaud within the first year. Please contact Blackbaud’s Talent Acquisition Coordinator, Rabia Baig, to begin the process of scheduling your move by calling 512-652-7962 or emailing her at
Rabia.Baig@blackbaud.com
|
◦
|
Additionally, Blackbaud will cover the costs of one moving trip for you and your immediate family to relocate to the Charleston, SC area. This coverage includes reasonable transportation, hotel expenses and other relevant expenses. A portion of
|
▪
|
Additionally, we will provide up to two months of temporary housing, with a maximum of $3,000 per month. Please be aware that housing allowances of any kind are now considered taxable income by the IRS. Blackbaud is required to reflect this payment in your semi-monthly pay and it will subject to all normal payroll taxes.
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▪
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Blackbaud will reimburse you for the costs of one house hunting trip for you and your spouse from Myrtle Beach, SC to Charleston, SC in accordance with Blackbaud’s Travel Policy. This includes economy class airfare, local transportation, hotel expenses, and normal and reasonable meal expenses. Please be aware that Blackbaud is required to reflect this payment in your semi-monthly pay and it will subject to all normal payroll taxes.
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▪
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You will be eligible for the full range of standard benefits offered to all Blackbaud employees, including medical, dental, life, and 401(k) with benefits effective on your date of hire. A complete explanation of our benefits program will be provided to you during New Employee Orientation.
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4-8-15
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/s/ Brian E. Boruff
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Date
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Brian Boruff
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▪
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Blackbaud will cover the cost of the move of household goods, through our selected vendor, from your Myrtle Beach, SC home to Charleston, South Carolina up to $12,000. It is important to note that your relocation benefits will expire 1 year from your date of hire. We require that you sign the repayment agreement in the event you leave Blackbaud within the first year.
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o
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Additionally, Blackbaud will cover the costs of one moving trip for you and your immediate family to relocate to the Charleston, SC area. This coverage includes reasonable transportation, hotel expenses and other relevant expenses. A portion of this moving trip will be subject to appropriate taxation in accordance with the Blackbaud Relocation Policy.
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▪
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You will receive a sign-on bonus in the amount of $50,000. This bonus, which will be paid on your first paycheck, is subject to all normal payroll taxes and will require that you sign the enclosed repayment agreement in the event you leave Blackbaud within the first year.
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▪
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Additionally, we will provide up to two months of temporary housing, with a maximum of $3,000 per month. Please be aware that housing allowances of any kind are now considered taxable income by the IRS. Blackbaud is required to reflect this payment in your semi-monthly pay and it will subject to all normal payroll taxes.
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▪
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Blackbaud will reimburse you for the costs of one house hunting trip for you and your spouse from Myrtle Beach, South Carolina to Charleston, SC in accordance with Blackbaud’s Travel Policy. This includes local transportation, hotel expenses, and normal and reasonable meal expenses. Please be aware that Blackbaud is required to reflect this payment in your semi-monthly pay and it will subject to all normal payroll taxes.
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1.
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You fail, for any reason under your control, to begin your employment with Blackbaud as agreed;
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2.
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Within 12 months of relocation, you are discharged by Blackbaud for cause; or
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3.
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Within 12 months of relocation, you terminate your employment with Blackbaud voluntarily.
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/s/ Brian E. Boruff
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/s/ Peggy Frazier
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Brian Boruff
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Human Resources
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5-5-15
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5-5-15
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Date
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Date
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1.
|
Nature of the Business
. For purposes of this Agreement, the "
Business
" shall be defined as products and/or services that are
both
(I) related to the design, development, marketing, sale or servicing of software, software applications, internet applications, donor research and management, prospective donor analysis or e-commerce solutions, or consulting with respect thereto; and (2) used by non-profit organizations in connection with fund raising, e-commerce, accounting, school administration or ticketing.
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2.
|
Consideration
. It is stipulated and agreed that this Agreement is being entered at the inception of Employee’s employment with the Company. Employee expressly acknowledges that signing this Agreement was a material inducement for the Company to enter into the employment relationship.
|
3.
|
Covenants Not to Use or Disclose Confidential information
.
|
(a)
|
Employee will hold all Confidential Information in strict confidence and will not use, publish, divulge or otherwise reveal or allow to be revealed any portion thereof to any third person, company or other entity, except to or with the prior written consent of the Company;
|
(b)
|
Employee will use his/her best efforts to assure that all Confidential Information is properly protected and kept from unauthorized persons or entities, and will immediately report to the Company any misuse of Confidential Information by another person or entity that Employee may encounter or of which Employee may become aware;
|
(c)
|
Employee will make no use of any Confidential Information except such use as is required in the performance of Employee's services for the Company; and
|
(d)
|
Upon termination of Employee's employment with the Company for any reason, or upon the Company's request, Employee will immediately deliver to the Company all documents, software, hardware, written materials and other items of any kind, and any copies thereof that contain Confidential Information.
|
4.
|
Covenant Not to Compete or Solicit Customers
.
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(a)
|
During the term of Employee's employment and for one (1) year following the termination of his/her employment (the "Restricted Period"), Employee will not, either directly or indirectly, for himself/herself or on behalf of any other person, business, enterprise or entity, compete with the Company by providing services similar to the Business of the Company to any other person, business, enterprise or entity that competes with the Company.
|
(b)
|
In addition to, but not in limitation of the restrictions set forth above, the Employee further promises and agrees that unless the Company has given its prior written consent, which can be withheld in its sole discretion, he/she will not advertise or market services as a Company employee or former Company employee or as an expert in any Company products or services or any similar designation in connection with the foregoing. During the term of Employee's employment and for one (1) year following termination of his/her employment, he/she will not, directly or indirectly, either on behalf of himself/herself or any other person, business, enterprise or entity, (i) solicit the Company's Customers for any business purpose in competition with or in conflict with the Business of the Company or (ii) divert business away from the Company with respect to the Company's Customers. For purposes of this Agreement "
Customers
" shall mean any current customer or prospective customer of the Company (l) with whom Employee had contact directly or-indirectly in connection with Employee's employment with the Company during the two (2) years prior to the termination of Employee's employment with the Company; or (ii) about whom Employee had access to proprietary, confidential, or commercially advantageous information through Employee's employment by the Company during the two (2) year period prior to the termination of Employee's employment with the Company.
|
5.
|
Covenant Not to Solicit Employees
.
In the event Employee's employment hereunder is terminated, for a period of one (1) year after the termination Employee will not, directly or indirectly, either on behalf of himself/herself or any other person, business, enterprise or entity, solicit for employment, employ, hire, contract with, or otherwise engage any Applicable Personnel. For purposes of this Section, "
Applicable Personnel
" means any person that was employed or engaged as an employee or independent contractor of the Company at any time during the six (6) month period prior to termination of Employee's employment with the Company.
|
6.
|
Exclusive Employment
. Employee shall not without the express prior written consent of the Company, directly or indirectly, during Employee's employment with the Company, render professional services to any person or firm for compensation or engage in any activity competitive with and/or adverse to the Company's purposes, mission or interests, whether alone, as a partner or member, or as an officer, director, employee or shareholder of any other corporation or entity or as a trustee, fiduciary or other representative of any other activity or entity, except with the express written approval of the Company, which the Company may revoke at any time in its sole discretion.
|
7.
|
Ownership and Assignment of Inventions
. Employee understands and agrees that Employee is performing work for hire for the Company and that any Inventions (as defined below) developed or conceived by Employee during Employee's employment with the Company are the sole property of the Company. "
Inventions
" shall include any inventions, improvements, developments, discoveries,
|
8.
|
Remedies
. It is stipulated and agreed that a breach by Employee of any of the covenants contained in Sections 3, 4, 5, 6 or 7 of this Agreement would cause irreparable damage to the Company. The Company, in addition to any other rights or remedies that the Company may have, shall be entitled to an injunction restraining Employee from violating or continuing any violation Of such covenants, Such Tight to obtain injunctive relief may be exercised at the option of the Company, concurrently with, prior to, after, or in lieu of the exercise of any other rights or remedies that the Company may have as a result of any such breach or threatened breach of this Agreement. Employee agrees that upon breach of any of the covenants contained in Sections 3, 4, 5, 6 or 7 of this Agreement, the Company shall be entitled to an accounting and repayment of all profits, royalties, compensation, and/or other benefits that Employee directly or indirectly has realized or may realize as a result of, or in connection with, any such breach. Employee further agrees that he/she will be liable for any expenses the Company may incur, including attorneys' fees, to enforce the terms of this Agreement.
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9.
|
No Effect on Trade Secret Laws
. Notwithstanding anything herein to the contrary, nothing in this Agreement is intended to alter, limit (temporally, geographically, or otherwise), or have any effect whatsoever on Employee's obligation to refrain from disclosing the Company's trade secrets. Nothing in this Agreement shall limit or otherwise affect the Company's remedies for any violation of applicable trade secrets laws, all of which shall be cumulative to any remedies available to the Company for a breach of this Agreement.
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10.
|
Other Agreements/Warranties
. Employee warrants that Employee is not bound by the terms of a confidentiality agreement or non-competition agreement or any other agreement with a former employer or other third party that would preclude Employee from accepting employment with the Company or that would preclude Employee from effectively performing Employee's duties for the Company. Employee further warrants that Employee has the right to make all disclosures that Employee will make to the Company during the course of Employee's employment with the Company. Employee agrees that Employee shall not disclose to the Company, or seek to induce the Company to use any confidential information in the nature of trade secrets or other proprietary information belonging to others and that in the event that the Company directs Employee to perform tasks that would result in the disclosure or use of any such confidential information, that Employee shall notify the Company in advance of any such disclosure. Employee agrees to defend, indemnify, and hold harmless the Company for any losses that it incurs as a result of the Employee's violation of any non-competition, non-solicitation, non-disclosure, or trade secret obligations that she may have to any other party during her Employment with the Company.
|
11.
|
Acknowledgment of Reasonableness
. Employee has carefully read and considered the provisions of this Agreement, has had the opportunity to consult with an attorney of Employee's choice, and agrees
|
12.
|
Severability, Survival
. The covenants described herein and all provisions and sub-provisions of this Agreement are intended to be severable. If any term, covenant, provision, sub-provision, or portion thereof is held to be invalid, void or unenforceable by a court of competent jurisdiction for any reason whatsoever, such ruling shall not affect the remainder of this Agreement, which shall remain in full force and effect. Any provision of this Agreement that contemplates performance or observance subsequent to termination of this Agreement, regardless of the date, cause or manner of such termination, shall survive such termination and shall continue in full force and effect.
|
13.
|
Dispute Resolution; Applicable Law
. Except as otherwise set forth in Section 8 above, the parties agree that all disputes, claims and controversies arising out of this Agreement shall be settled by arbitration in accordance with the American Arbitration Association rules, such arbitration to take place in the location of the Company office to which Employee is assigned, and judgment upon the award rendered in any such arbitration may be entered in any court, state or federal, having jurisdiction. This Agreement and any dispute or controversy arising out of or relating to this Agreement shall, in all respects, be governed by and construed according to the laws of the State of South Carolina, without regard to its conflict of law principles.
|
14.
|
Waiver
. Any waiver of a breach of any provision of this Agreement must be in writing and signed by the waiving party. Any waiver of a breach of any provision of this Agreement shall not operate or be construed as a waiver of, or estoppel with respect to, any subsequent breach of such provision or any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not deprive that party of its right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
|
15.
|
Employment At-Will
. Nothing in this Agreement shall be interpreted to create a contract of employment for any specific time. Employee is and shall remain an employee at-will, and either party may terminate the employment relationship at any time for any reason or no reason at all.
|
16.
|
Entire Agreement
. This Agreement constitutes the entire agreement between the parties as of the date hereof with respect to the subject matter hereof and supersedes any previous understandings, representations, statements and agreements, whether oral or written, between or among the parties with respect to the subject matter hereof. This Agreement may be modified only by written agreement, signed by all of the parties and expressly purporting to modify this Agreement.
|
17.
|
No Assignment / Binding Effect
. Employee may not assign this Agreement to any other person or entity without the Company's express written consent, which may be withheld for any reason or no reason at all. This Agreement shall be binding on Employee's heirs, successors, and permitted assigns.
|
18.
|
Tolling
. The Restricted Period shall be tolled for any period(s) of violation, including period(s) of time required for litigation to enforce the covenants of this Agreement.
|
19.
|
Counterparts
. This Agreement may be executed simultaneously in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement,
|
|
|
EMPLOYEE:
|
|
|
|
|
|
|
|
Brian E. Boruff
|
|
|
|
Printed Name
|
|
|
|
|
|
|
|
/s/ Brian E. Boruff
|
|
|
|
Signature
|
|
|
|
|
|
|
|
|
|
|
|
BLACKBAUD, INC.:
|
|
|
|
|
|
|
|
/s/ John Mistretta
|
|
|
|
|
|
|
By:
|
John Mistretta
|
|
|
Its:
|
Executive Vice President, Human Resources
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Blackbaud, Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
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;
|
b.
|
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;
|
c.
|
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
|
d.
|
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
|
5.
|
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):
|
a.
|
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
|
b.
|
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.
|
Date:
|
May 4, 2016
|
By:
|
|
/s/ Michael P. Gianoni
|
|
|
|
|
Michael P. Gianoni
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Blackbaud, Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
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;
|
b.
|
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;
|
c.
|
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
|
d.
|
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
|
5.
|
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):
|
a.
|
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
|
b.
|
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.
|
Date:
|
May 4, 2016
|
By:
|
|
/s/ Anthony W. Boor
|
|
|
|
|
Anthony W. Boor
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
May 4, 2016
|
By:
|
|
/s/ Michael P. Gianoni
|
|
|
|
|
Michael P. Gianoni
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
May 4, 2016
|
By:
|
|
/s/ Anthony W. Boor
|
|
|
|
|
Anthony W. Boor
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
(Principal Financial and Accounting Officer)
|