Blackbaud, Inc. Announces Fourth Quarter and Full Year 2011 Results

Blackbaud, Inc. (Nasdaq: BLKB), the leading provider of software and related services designed specifically for nonprofit organizations, today announced financial results for its fourth quarter and fiscal year ended December 31, 2011.

Marc Chardon, Chief Executive Officer of Blackbaud, stated, “We continued to enjoy solid sales activity during the fourth quarter, contributing to a record year for Blackbaud. The combination of improved customer demand, solid execution and our broad suite of solutions enabled us to re-accelerate revenue growth back to the double digit range during 2011. This was a significant accomplishment in light of the continued challenging economic environment, and it provides us with momentum for 2012.”

Chardon added, “During 2011, we broke records in the number of new Blackbaud CRM customers signed, the number of CRM implementations moving into live production and the performance of our online fundraising solutions. With our pending acquisition of Convio, we are eager to better serve our customers with the most comprehensive CRM and online fundraising solution. We continue to believe that the strength and complementary nature of our combined value proposition will position Blackbaud well to address the large and highly underpenetrated market for delivering innovative solutions to the nonprofit industry.”

Fourth Quarter 2011 GAAP Financial Results

Blackbaud reported total revenue of $95.0 million for the fourth quarter of 2011, an increase of 11% compared to $85.8 million for the fourth quarter of 2010. Income from operations and net income, determined in accordance with GAAP, were $10.6 million and $6.4 million, respectively, compared with $10.9 million and $7.2 million, respectively, for the fourth quarter of 2010. Diluted earnings per share were $0.14 for the fourth quarter of 2011, compared with $0.17 in the same period last year.

Fourth Quarter 2011 Non-GAAP and Pro Forma Financial Results

Non-GAAP income from operations, which excludes stock-based compensation expense, amortization of intangibles arising from business combinations, acquisition-related expenses and an impairment of a cost method investment, was $19.1 million for the fourth quarter of 2011, an increase from $17.6 million in the same period last year. Non-GAAP net income was $11.8 million for the fourth quarter of 2011, an increase from $10.8 million in the same period last year. Non-GAAP diluted earnings per share were $0.27 for the fourth quarter of 2011, up from $0.25 in the same period last year.

For the fourth quarter of 2011, Blackbaud recognized a charge against its revenue in recognition of the remaining work required to bring several early adopter CRM implementations to successful conclusion, in addition to other unrelated accounting adjustments that were recognized during the period. These items had a net negative impact of approximately $4.0 million on revenue and $3.1 million on non-GAAP income from operations for the fourth quarter of 2011. Pro forma revenue, which excludes these items, was $99.0 million for the fourth quarter of 2011, an increase of 15% year-over-year and at the mid-point of guidance of $98.0 million to $100.0 million. Pro forma income from operations was $22.2 million for the fourth quarter of 2011 above the high-end of guidance of $19.6 million to $21.1 million; and pro forma diluted earnings per share was $0.31, above the high-end of guidance of $0.27 to $0.29.

A reconciliation between GAAP, non-GAAP and pro forma results has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

“Blackbaud’s fourth quarter revenue and profitability were consistent with or better than previously issued guidance on a pro forma basis,” said Tony Boor, Chief Financial Officer of Blackbaud. “Since joining Blackbaud, one of my top areas of focus has been completing a comprehensive review of the Company’s financial processes. As a result of that review, we have identified several areas for improvement and plan to make some targeted investments in our back-office operations to help ensure that the sole focus of our commentary is discussing the strength of Blackbaud’s operational performance. I am pleased with the quality of work performed by our team, and believe that we have a solid foundation in place to accommodate our planned growth.”

Boor added, “The momentum of our business is evidenced by the fact that we are planning for double digit to low teens revenue growth for 2012. In addition, we believe Blackbaud is well positioned to deliver a twenty percent non-GAAP operating margin, even as we increase investments to drive further improvement in our long-term revenue growth and ensure that we have the infrastructure and processes in place to scale our business efficiently and effectively.”

Balance Sheet and Cash Flow

The Company ended the fourth quarter with $52.5 million in cash, compared to $52.0 million at the end of the third quarter. The Company generated $16.9 million in cash flow from operations during the fourth quarter, contributing to $85.5 million for the twelve months ended December 31, 2011. Cash from operations for the full year 2011 was up 53% from $56.0 million for the full year 2010.

While not reflected on Blackbaud’s 2011 year-end balance sheet, the Company recently closed on a $325 million credit facility that provides Blackbaud with the financing capacity to complete the acquisition of Convio, following regulatory approval and completion of the cash tender offer. Additional details related to this credit facility can be found in the Company’s filings with the SEC.

Full Year 2011 GAAP and Non-GAAP Financial Results

Blackbaud reported total revenue of $370.9 million for the full year 2011, an increase of 14% compared to $326.6 million for 2010. Income from operations and net income, determined in accordance with GAAP, were $50.9 million and $33.2 million for the full year 2011, respectively, compared with $46.0 million and $29.2 million, respectively, for 2010. Diluted earnings per share were $0.75 for the full year 2011, compared with $0.67 for 2010.

Non-GAAP income from operations, which excludes stock-based compensation expense, amortization of intangibles arising from business combinations, acquisition-related expenses, an impairment of a cost method investment and a gain on the sale of assets, was $76.5 million for the full year 2011, an increase from $67.2 million for 2010. Non-GAAP net income was $46.9 million for the full year 2011, an increase from $40.9 million for 2010. Non-GAAP diluted earnings per share were $1.06 for the full year 2011, an increase from $0.93 for 2010.

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

Dividend and Share Repurchase Program

Blackbaud announced today that its Board of Directors has approved a first quarter 2012 dividend of $0.12 per share payable on March 15, 2012, to stockholders of record on March 5, 2012. Additionally, as of December 31, 2011, $50.0 million remained available under the Company’s share repurchase program.

Revision of Prior Period Financial Statements

During the 2011 year-end review process, the Company identified certain prior period errors related principally to revenue recognition, accounting for income taxes and the capitalization of software development costs. These errors impacted reporting periods beginning in the year ended December 31, 2006 and subsequent periods through September 30, 2011.

The net income impact of these errors was a decrease in net income of $0.6 million, $0.9 million, $0.9 million, $1.6 million and $2.2 million for the years ended December 31, 2010, 2009, 2008, 2007 and 2006, respectively, and an increase in net income of $0.6 million for the nine months ended September 30, 2011.

The revisions for these corrections to the applicable prior periods will be reflected in the Company’s Annual Report on Form 10-K for 2011, which is expected to be on file with the SEC by the end of February 2012. Additionally, the Company has included “as reported” vs. “as adjusted” income statement tables for the full year and fourth quarter 2010 as part of this press release. Moreover, the company has posted additional supplemental schedules with “as reported” vs. “as adjusted” results dating back to 2006 on the “Investor Relations” page of the Company’s website at www.blackbaud.com/investorrelations.

Conference Call Details

Blackbaud will host a conference call today, February 22, 2012, at 5:00 p.m. (Eastern Time) to discuss the Company's financial results, operations and related matters. To access this call, dial 888-298-3451 (domestic) or 719-457-2606 (international). A replay of this conference call will be available through February 29, 2012, at 877-870-5176 (domestic) or 858-384-5517 (international). The replay passcode is 9469166. A live webcast of this conference call will be available on the "Investor Relations" page of the Company's website at www.blackbaud.com/investorrelations, and a replay will be archived on the website as well.

About Blackbaud

Serving the nonprofit and education sectors for 30 years, Blackbaud (NASDAQ: BLKB) combines technology and expertise to help organizations achieve their missions. Blackbaud works with more than 26,000 customers in over 60 countries that support higher education, healthcare, human services, arts and culture, faith, the environment, independent K-12 education, animal welfare, and other charitable causes. The company offers a full spectrum of cloud-based and on-premise software solutions and related services for organizations of all sizes including: fundraising, eMarketing, social media, advocacy, constituent relationship management (CRM), analytics, financial management, and vertical-specific solutions. Using Blackbaud technology, these organizations raise more than $100 billion each year. Blackbaud has been recognized as a top company by Forbes, InformationWeek, and Software Magazine and honored by Best Places to Work. Blackbaud is headquartered in Charleston, South Carolina and has employees throughout the US, and in Australia, Canada, Hong Kong, Mexico, the Netherlands, and the United Kingdom. For more information, visit www.blackbaud.com.

Forward-looking Statements

Except for historical information, all of the statements, expectations, and assumptions contained in this news release are forward-looking statements that involve a number of risks and uncertainties. Although Blackbaud attempts to be accurate in making these forward-looking statements, it is possible that future circumstances might differ from the assumptions on which such statements are based. In addition, other important factors that could cause results to differ materially include the following: general economic risks; uncertainty regarding increased business and renewals from existing customers; continued success in sales growth; risks related to closing the proposed acquisition of Convio; management of integration of acquired companies and other risks associated with acquisitions; risks associated with successful implementation of multiple integrated software products; the ability to attract and retain key personnel; risks related to our dividend policy and share repurchase program, including potential limitations on our ability to grow and the possibility that we might discontinue payment of dividends; risks relating to restrictions imposed by the credit facility; risks associated with management of growth; lengthy sales and implementation cycles, particularly in larger organizations; technological changes that make our products and services less competitive; and the other risk factors set forth from time to time in the SEC filings for Blackbaud, copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from Blackbaud's investor relations department. All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc.

Non-GAAP Financial Measures

Blackbaud has provided in this release financial information that has not been prepared in accordance with GAAP. This information includes non-GAAP gross profit, non-GAAP income from operations, non-GAAP net income and non-GAAP diluted earnings per share. Blackbaud uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating Blackbaud's ongoing operational performance. Blackbaud believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial results with other companies in Blackbaud's industry, many of which present similar non-GAAP financial measures to investors. As noted, the non-GAAP financial results discussed above exclude stock-based compensation expense, costs associated with amortization of intangibles arising from business combinations, one-time write-offs or expenses incurred in connection with acquisitions, impairment of a cost method investment and a gain in connection with the sale of assets.

This release also includes non-GAAP revenue, operating income, net income and diluted earnings per share adjusted for unusual items and accounting adjustments in the fourth quarter of 2011. We use these measures and believe them useful to investors because they provide additional insight in comparing results from period to period.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. As previously mentioned, a reconciliation of our non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included below in this press release.

Blackbaud, Inc.
Consolidated balance sheets
(Unaudited)
		December 31,				December 31,
(in thousands, except share amounts)			2011				2010
Assets
Current assets:
Cash and cash equivalents		$	52,520			$	28,004
Donor restricted cash			40,205				16,359
Accounts receivable, net of allowance of $3,913 and $2,687 at December 31, 2011 and December 31, 2010, respectively			62,656				59,296
Prepaid expenses and other current assets			31,016				32,139
Deferred tax asset, current portion			1,551				5,164
Total current assets			187,948				140,962
Property and equipment, net			34,397				22,963
Deferred tax asset			29,376				42,314
Goodwill			90,122				76,247
Intangible assets, net			44,660				38,515
Other assets			6,087				2,805
Total assets		$	392,590			$	323,806
Liabilities and stockholders' equity
Current liabilities:
Trade accounts payable		$	13,464			$	9,620
Accrued expenses and other current liabilities			32,707				28,278
Donations payable			40,205				16,359
Deferred revenue			153,665				143,761
Total current liabilities			240,041				198,018
Deferred revenue, noncurrent			9,772				6,900
Other noncurrent liabilities			2,775				2,419
Total liabilities			252,588				207,337
Commitments and contingencies
Stockholders' equity:
Preferred stock; 20,000,000 shares authorized, none outstanding			-				-
Common stock, $0.001 par value; 180,000,000 shares authorized, 53,959,532 and 53,316,280 shares issued at December 31, 2011 and December 31, 2010, respectively			54				53
Additional paid-in capital			175,401				158,372
Treasury stock, at cost; 9,019,824 and 8,842,882 shares at December 31, 2011 and December 31, 2010, respectively			(166,226	)			(161,186	)
Accumulated other comprehensive loss			(1,148	)			(812	)
Retained earnings			131,921				120,042
Total stockholders' equity			140,002				116,469
Total liabilities and stockholders' equity		$	392,590			$	323,806

Blackbaud, Inc.
Consolidated statements of operations
(Unaudited)
		Three months ended December 31,							Years ended December 31,
(in thousands, except share and per share amounts)			2011				2010			2011				2010
Revenue
License fees		$	4,875			$	6,510		$	19,475			$	23,719
Subscriptions			27,651				21,859			103,544				83,912
Services			25,865				23,286			108,781				87,663
Maintenance			33,263				31,594			130,604				124,559
Other revenue			3,391				2,519			8,464				6,712
Total revenue			95,045				85,768			370,868				326,565
Cost of revenue
Cost of license fees			735				693			3,345				3,003
Cost of subscriptions			12,276				8,317			42,536				31,155
Cost of services			19,896				18,030			79,086				66,755
Cost of maintenance			6,371				6,086			25,178				24,123
Cost of other revenue			2,796				3,272			7,049				7,103
Total cost of revenue			42,074				36,398			157,194				132,139
Gross profit			52,971				49,370			213,674				194,426
Operating expenses
Sales and marketing			18,280				17,833			75,361				69,469
Research and development			12,460				11,132			47,672				45,499
General and administrative			9,580				9,272			36,933				32,636
Impairment of cost method investment			1,800				-			1,800				-
Amortization			252				211			980				798
Total operating expenses			42,372				38,448			162,746				148,402
Income from operations			10,599				10,922			50,928				46,024
Interest income			50				20			183				84
Interest expense			(57	)			96			(200	)			(74	)
Other income (expense), net			168				31			346				(98	)
Income before provision for income taxes			10,760				11,069			51,257				45,936
Income tax provision			4,409				3,828			18,037				16,749
Net income		$	6,351			$	7,241		$	33,220			$	29,187
Earnings per share
Basic		$	0.15			$	0.17		$	0.76			$	0.68
Diluted		$	0.14			$	0.17		$	0.75			$	0.67
Common shares and equivalents outstanding
Basic weighted average shares			43,738,007				43,083,612			43,522,563				43,145,189
Diluted weighted average shares			44,337,711				43,776,108			44,149,054				43,876,155
Dividends per share		$	0.12			$	0.11		$	0.48			$	0.44

Blackbaud, Inc.
Consolidated statements of cash flows
(Unaudited)
		Years ended December 31,
(in thousands)			2011				2010
Cash flows from operating activities
Net income		$	33,220			$	29,187
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			16,995				16,189
Provision for doubtful accounts and sales returns			5,646				2,773
Stock-based compensation expense			14,884				13,059
Excess tax benefits from stock based compensation			(932	)			(2,665	)
Deferred taxes			13,533				11,313
Impairment of cost method investment			1,800				-
Gain on sale of assets			(549	)			-
Other non-cash adjustments			(878	)			(22	)
Changes in operating assets and liabilities, net of acquisition of businesses:
Accounts receivable			(8,692	)			(12,778	)
Prepaid expenses and other assets			(2,915	)			(10,109	)
Trade accounts payable			1,714				228
Accrued expenses and other liabilities			(1,056	)			(4,248	)
Donor restricted cash			(22,862	)			(3,446	)
Donations payable			22,862				3,446
Deferred revenue			12,757				13,121
Net cash provided by operating activities			85,527				56,048
Cash flows from investing activities
Purchase of property and equipment			(18,215	)			(10,760	)
Purchase of net assets of acquired companies, net of cash acquired			(23,385	)			(5,334	)
Purchase of investment			-				(2,000	)
Capitalized software development costs			(1,012	)			(175	)
Purchase of intangible assets			-				(130	)
Proceeds from sale of assets			874				-
Net cash used in investing activities			(41,738	)			(18,399	)
Cash flows from financing activities
Dividend payments to stockholders			(21,429	)			(19,490	)
Proceeds from exercise of stock options			2,041				8,065
Excess tax benefits from stock based compensation			932				2,665
Purchase of treasury stock			-				(22,613	)
Proceeds from issuance of debt			-				4,000
Payments on debt			-				(5,175	)
Payments of deferred financing costs			(767	)			-
Payments on capital lease obligations			(40	)			(164	)
Net cash used in financing activities			(19,263	)			(32,712	)
Effect of exchange rate on cash and cash equivalents			(10	)			298
Net increase in cash and cash equivalents			24,516				5,235
Cash and cash equivalents, beginning of year			28,004				22,769
Cash and cash equivalents, end of year		$	52,520			$	28,004

Blackbaud, Inc.
Reconciliation of GAAP to Non-GAAP financial measures
(Unaudited)
		Three months ended December 31,								Years ended December 31,
(in thousands, except per share amounts)			2011				2010				2011				2010
GAAP revenue		$	95,045			$	85,768			$	370,868			$	326,565
GAAP gross profit		$	52,971			$	49,370			$	213,674			$	194,426
Non-GAAP adjustments:
Add: Stock-based compensation expense			903				865				3,278				2,948
Add: Amortization of intangibles from business combinations			1,725				1,648				6,598				6,334
Total Non-GAAP adjustments			2,628				2,513				9,876				9,282
Non-GAAP gross profit		$	55,599			$	51,883			$	223,550			$	203,708
GAAP income from operations		$	10,599			$	10,922			$	50,928			$	46,024
Non-GAAP adjustments:
Add: Stock-based compensation expense			3,971				3,819				14,884				13,059
Add: Amortization of intangibles from business combinations			1,977				1,859				7,578				7,132
Add: Acquisition-related expenses			786				1,000				1,840				1,000
Add: Impairment of cost method investment			1,800				-				1,800				-
Less: Gain on sale of assets			-				-				(549	)			-
Total Non-GAAP adjustments			8,534				6,678				25,553				21,191
Non-GAAP income from operations		$	19,133			$	17,600			$	76,481			$	67,215
GAAP net income		$	6,351			$	7,241			$	33,220			$	29,187
Non-GAAP adjustments:
Add: Total Non-GAAP adjustments affecting income from operations			8,534				6,678				25,553				21,191
Less: Tax impact related to Non-GAAP adjustments			(3,117	)			(3,093	)			(11,919	)			(9,431	)
Non-GAAP net income		$	11,768			$	10,826			$	46,854			$	40,947
Shares used in computing Non-GAAP diluted earnings per share			44,338				43,776				44,149				43,876
Non-GAAP diluted earnings per share		$	0.27			$	0.25			$	1.06			$	0.93
Detail of Non-GAAP adjustments:
Stock-based compensation expense:
Cost of revenue
Cost of subscriptions		$	164			$	113			$	571			$	392
Cost of services			571				512				1,966				1,742
Cost of maintenance			168				240				741				814
Subtotal			903				865				3,278				2,948
Operating expenses
Sales and marketing			391				389				1,325				1,366
Research and development			766				714				3,039				2,844
General and administrative			1,911				1,851				7,242				5,901
Subtotal			3,068				2,954				11,606				10,111
Total stock-based compensation expense		$	3,971			$	3,819			$	14,884			$	13,059
Amortization of intangibles from business combinations
Cost of revenue
Cost of license fees		$	156			$	171			$	635			$	588
Cost of subscriptions			901				778				3,341				3,058
Cost of services			400				370				1,572				1,390
Cost of maintenance			249				310				975				1,223
Cost of other revenue			19				19				75				75
Subtotal			1,725				1,648				6,598				6,334
Operating expenses			252				211				980				798
Total amortization of intangibles from business combinations		$	1,977			$	1,859			$	7,578			$	7,132

Blackbaud, Inc.
Reconciliation of GAAP to Pro Forma Non-GAAP
(Unaudited)
		Three months ended December 31,
(in thousands, except per share amounts)			2011				2010
GAAP revenue		$	95,045			$	85,768
Non-GAAP unusual adjustments:
Add: Early adopter credits			3,365				-
Add: Change in set-up fees estimate			292				-
Add: Change in analytic revenue recognition			333				-
Pro Forma Non-GAAP revenue		$	99,035			$	85,768
GAAP income from operations		$	10,599			$	10,922
Non-GAAP adjustments:
Add: Stock-based compensation expense			3,971				3,819
Add: Amortization of intangibles from business combinations			1,977				1,859
Add: Acquisition-related expenses			786				1,000
Add: Impairment of cost method investment			1,800				-
Non-GAAP income from operations		$	19,133			$	17,600
Non-GAAP unusual adjustments:
Add: Early adopter credits			2,715				-
Add: Change in set-up fees estimate			163				-
Add: Change in analytic revenue recognition			233				-
Pro Forma Non-GAAP income from operations		$	22,244			$	17,600
GAAP net income		$	6,351			$	7,241
Non-GAAP adjustments:
Add: Total Non-GAAP adjustments affecting income from operations			8,534				6,678
Less: Tax impact related to Non-GAAP adjustments			(3,117	)			(3,093	)
Non-GAAP net income		$	11,768			$	10,826
Non-GAAP unusual adjustments:
Add: Total Non-GAAP as adjusted items affecting income from operations			3,111				-
Less: Tax impact related to Non-GAAP as adjusted items			(1,214	)			-
Pro Forma Non-GAAP net income		$	13,665			$	10,826
Shares used in computing Non-GAAP diluted earnings per share			44,338				43,776
Pro Forma Non-GAAP diluted earnings per share		$	0.31			$	0.25

Blackbaud, Inc.
Revised Historical Financial Information
(Unaudited)
During the three months ended December 31, 2011, the Company identified certain prior period errors related principally to revenue recognition, accounting for income taxes and the capitalization of software development costs. These errors impacted reporting periods beginning in the year ended December 31, 2006 and subsequent periods through September 30, 2011. The Company concluded these errors were not material individually or in the aggregate to any of the prior reporting periods, and therefore, amendments of previously filed reports were not required. However, the cumulative error would be material in the year ended December 31, 2011, if the entire correction was recorded in the fourth quarter of 2011, and would have impacted comparisons to prior periods. As such, the revisions for these corrections to the applicable prior periods are reflected in this financial information and will be reflected in future filings containing such financial information.
Revised consolidated statements of operations amounts
		Year ended December 31, 2010													Three months ended December 31, 2010
		As previously													As previously
(in thousands, except share and per share amounts)		reported				Adjustment				Revised					reported			Adjustment				Revised
Revenue
License fees		$	23,719			$	-			$	23,719				$	6,510		$	-			$	6,510
Subscriptions			82,516				1,396				83,912					21,719			140				21,859
Services			89,585				(1,922	)			87,663					24,618			(1,332	)			23,286
Maintenance			124,562				(3	)			124,559					31,592			2				31,594
Other revenue			6,712				-				6,712					2,519			-				2,519
Total revenue			327,094				(529	)			326,565					86,958			(1,190	)			85,768
Cost of revenue
Cost of license fees			2,880				123				3,003					662			31				693
Cost of subscriptions			31,109				46				31,155					8,317			-				8,317
Cost of services			66,632				123				66,755					17,871			159				18,030
Cost of maintenance			24,091				32				24,123					6,086			-				6,086
Cost of other revenue			7,103				-				7,103					3,272			-				3,272
Total cost of revenue			131,815				324				132,139					36,208			190				36,398
Gross profit			195,279				(853	)			194,426					50,750			(1,380	)			49,370
Operating expenses
Sales and marketing			70,186				(717	)			69,469					17,787			46				17,833
Research and development			45,527				(28	)			45,499					11,132			-				11,132
General and administrative			32,471				165				32,636					9,272			-				9,272
Amortization			798				-				798					211			-				211
Total operating expenses			148,982				(580	)			148,402					38,402			46				38,448
Income from operations			46,297				(273	)			46,024					12,348			(1,426	)			10,922
Interest income			84				-				84					20			-				20
Interest expense			(74	)			-				(74	)				96			-				96
Other (expense) income, net			(127	)			29				(98	)				2			29				31
Income before provision for income taxes			46,180				(244	)			45,936					12,466			(1,397	)			11,069
Income tax provision			16,375				374				16,749					3,922			(94	)			3,828
Net income		$	29,805			$	(618	)		$	29,187				$	8,544		$	(1,303	)		$	7,241
Earnings per share
Basic		$ 0.69					($ 0.01	)		$ 0.68					$ 0.20				($ 0.03	)		$ 0.17
Diluted		$ 0.68					($ 0.01	)		$ 0.67					$ 0.19				($ 0.03	)		$ 0.17
Common shares and equivalents outstanding
Basic weighted average shares			43,145,189								43,145,189					43,083,612							43,083,612
Diluted weighted average shares			43,876,155								43,876,155					43,776,108							43,776,108
Dividends per share		$ 0.44								$ 0.44					$ 0.11							$ 0.11

Blackbaud, Inc.
Revised Historical Financial Information (continued)
(Unaudited)
The following tables only display lines in which changes have occurred.
Revised consolidated statements of cash flows amounts
		Year ended December 31, 2010
		As previously
(in thousands)		reported				Adjustment				Revised
Cash flows from operating activities
Net income		$	29,805			$	(618	)		$	29,187
Depreciation and amortization			16,068				121				16,189
Excess tax benefits from stock based compensation			(2,629	)			(36	)			(2,665	)
Deferred taxes			11,201				112				11,313
Accounts receivable			(13,051	)			273				(12,778	)
Prepaid expenses and other assets			(9,599	)			(510	)			(10,109	)
Trade accounts payable			208				20				228
Accrued expenses and other current liabilities			(4,775	)			527				(4,248	)
Deferred revenue			12,870				251				13,121
Net cash provided by operating activities			55,908				140				56,048
Cash flows from investing activities
Capitalized software development costs			-				(175	)			(175	)
Net cash used in investing activities			(18,224	)			(175	)			(18,399	)
Cash flows from financing activities
Excess tax benefits from stock based compensation			2,629				36				2,665
Net cash used in financing activities			(32,748	)			36				(32,712	)
Effect of exchange rate on cash and cash equivalents			269				29				298
Net increase in cash and cash equivalents			5,205				30				5,235
Cash and cash equivalents, beginning of year			22,769				-				22,769
Cash and cash equivalents, end of year		$	27,974			$	30			$	28,004
Revised consolidated balance sheets amounts
		At December 31, 2010
		As previously
(in thousands, except share amounts)		reported				Adjustment				Revised
Assets
Cash and cash equivalents		$	27,974			$	30			$	28,004
Accounts receivable			59,804				(508	)			59,296
Prepaid expenses and other current assets			33,847				(1,708	)			32,139
Deferred tax asset			44,639				(2,325	)			42,314
Other assets			2,579				226				2,805
Total assets		$	328,091			$	(4,285	)		$	323,806
Liabilities and stockholders' equity
Trade accounts payable		$	9,883			$	(263	)		$	9,620
Accrued expenses and other current liabilities			28,322				(44	)			28,278
Deferred revenue			141,149				2,612				143,761
Additional paid-in capital			158,419				(47	)			158,372
Accumulated other comprehensive loss			(512	)			(300	)			(812	)
Retained earnings			126,285				(6,243	)			120,042
Total liabilities and stockholders' equity		$	328,091			$	(4,285	)		$	323,806