August 8, 2006

Blackbaud revenues climb

John P. McDermott  /  The Post and Courier

Company aims to diversify its software offerings

Bolstered by sales of its mainstay software products, Charleston-based Blackbaud Inc. reported a healthy jump in its second-quarter revenues Monday, while profits fell slightly, namely because of a large onetime tax gain the company booked last year. Blackbaud also increased its sales outlook for the year.

The Daniel Island firm, which develops software for nonprofit organizations, said its revenue for the three months ended June 30 was $48.8 million, up 14 percent compared with the second quarter of 2005. "Our growth continued at a solid pace," Marc Chardon, Blackbaud's chief executive officer, said during a conference call with industry analysts.

Net income for the second quarter was $7.7 million, or 17 cents a share, compared to $8.5 million, or 18 cents a share, last year. The company said the profit decline stemmed largely from $2.9 million in state tax credits it recorded in the 2005 second quarter that did not recur this year.

"We believe the breadth and depth of Blackbaud's product portfolio and distribution model is a key competitive advantage and was a primary factor in our strong performance in the second quarter," Chardon said.

For the first six months of the year, sales at Blackbaud rose 13 percent to $92.5 million while profits fell to $13.9 million, down 45 percent. The company's first-quarter earnings were bogged down by stock-option expenses. Chardon also said Blackbaud is looking to diversify its software offerings beyond it three core products, led by the Raiser's Edge, which account for the majority of its sales. He said "there is a large, untapped market for state-of-the-art technology that helps nonprofit organizations improve their efficiency, donor relationships and ability to raise money to support their missions."

Chardon went on to say that Blackbaud has recently identified several new opportunities within the nonprofit sector that will allow it to expand its business. The company raised its revenue estimate for the rest of the year, saying 2006 sales should total between $190 million to 193.5 million, for a midpoint growth rate of about 15 percent. It also declared a third-quarter dividend Monday of 7 cents a share payable on Sept. 15 to stockholders of record Aug. 28. Shares of Blackbaud fell 39 cents at the close of trading Monday to $19.80.