bbb investor ppt 2010_2011
TRANSCRIPT
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ac oar2011 Outlook & Guidance Call
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StatementAnystatementsint ispresentationa out utureexpectations,p ansandprospectsforBlackboardandotherstatementscontainingthewordsbelieves,anticipates,plans,expects,will,andsimilarex ressions constitute forwardlookin statements within the meanin
of
The
Private
Securities
Litigation
Reform
Act
of
1995.
Actual
results
maydiffer
materially
from
those
indicated
by
such
forward
looking
statementsasaresultofvariousimportantfactors,includingthe
November5,2010withtheSecuritiesandExchangeCommission.Inaddition,theforwardlookingstatementsincludedinthispresentationrepresent
the
Companys
views
as
of
January
12,
2011.
The
Company
anticipatesthatsubsequenteventsanddevelopmentswillcausetheCompanysviewstochange.However,whiletheCompanymayelecttoupdatetheseforwardlookingstatementsatsomepointinthefuture,
forwardlooking
statements
should
not
be
relied
upon
as
representing
theCompanysviewsasofanydatesubsequenttoJanuary12,2011.
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Agenda TheMarket&theOpportunity
LaunchofBlackboardStudentServices
Acquisition
of
Presidium
Inc. TheBlackboardSolutions
2010&2011FinancialUpdate
Q4&
FY
2010
Guidance
Re
Affirmed
Q1&FY2011Guidance
IntroductionofNewNonGAAPMetrics
Appendix
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the O ortunitMichael Chasen, Chief Executive Officer
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OurMission
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MarketTrends
Supplementbricks&mortareducation
Historical Structure Accelerating Trends
Deliverfullyonline coursesanddegrees1.Delivery
Expandteaching
/learning
tools
Measure,track
and
evaluate
educational
performanceandoutcomesusingdataanalytics
2.Focus
3.Sco e
Internet
Mobile4.Platform
oca y ep oye or os e
Textbooks
aa ou ompu ng
Digitalinteractivecontent
.
6.Content
7.Competition Institutions
have
little
direct
competition
increasedfocus
on
cost,
accountability
and
service.
8.Procurement MultiplevendorswithlimitedinteroperabilitySinglesolutionproviderwithafullyintegrated
setofproductsandservices
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TheOpportunity
Toprovideacomprehensiveintegratedstackofcloudbased
SaaStechnologysolutionstopowereducation.
Toprovideacomprehensiveintegratedstackofcloudbased
SaaStechnologysolutionstopowereducation.
By o ngsowecan:By o ngsowecan:
1.1. HelpinstitutionscreateamoreseamlesssolutionacrosstheHelpinstitutionscreateamoreseamlesssolutionacrossthe
education
educationexperience.experience.
2.2. ProvideProvideastandardplatformforastandardplatformfor learningapplicationsandlearningapplicationsandcontent(theOperatingSystemofEducation).content(theOperatingSystemofEducation).
3.3. Enabledetailedanal ticsontheeducational rocesseswithinEnabledetailedanal ticsontheeducational rocesseswithin
andacross
institutions.
and
across
institutions.
4.4. MoreMoreeasilyeasilyprovideaccesstoprovideaccesstothesesolutionsthesesolutionsthroughthroughmobilemobileandotherdevices.andotherdevices.
5.5. WorkwithinstitutionsWorkwithinstitutionstoprovideanimprovededucationaltoprovideanimprovededucational
experiencein
a
more
cost
effective
wayexperience
in
a
more
cost
effective
way
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PathsforContinuedGrowth
PursuestrategicPursuestrategicpartnershipspartnerships
Increasepenetration
in
emerging
marketsIncrease
penetration
in
emerging
markets
BringadditionalproductstomarketBringadditionalproductstomarket
GrowannuallicenseGrowannuallicenserevenuewithexistingclientsrevenuewithexistingclients
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Introducing
Student ServicesMichael Chasen, Chief Executive OfficerRay Henderson, President Bb Learn
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PresidiumOverviewres um s one o e wor s ea ng
Education Services Management (ESM) providers.
Status: Private eLearningSupportServices
24x7supportforstudents,facultyand
Location: Reston,VA
Clients: 700+total
institutions
a m n stratorsensur ngsuccess u
deploymentandhighlevelsofadoptionof
enterpriseeLearningsystems
Model: Annualsubscriptionservice
modeltoprovidestudent
servicesandsupport.
u en ecyc e anagemen erv ces
EnrollmentManagement FinancialAid StudentAccounts
DealTerms: Blackboard
acquired
the
90%
of
Presidiumthatitdidnotalready
ownfortotalconsiderationof
e en on
ITSupportServices
Singlepointofcontactforallstudentand,
excludingtransactioncosts.
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acu ya m n s ra vean aca em cso ware
serviceandsupportquestions.
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WhyBlackboardStudentServices?
ImprovedSupportandRenewalRates:Raisesthequalityofendusersupportforourexistingproducts andallowsustoownthe
.
CompetitiveDifferentiation:
Most
advanced
eLearning
technology,
thelargestscaleeLearninghostingdatacenters,andnowthemost
advancedteacher/studentsupport allintegratedtowork
together.
ProvidesBlackboard
with
a
one
stop
shop
suite
offering
versusothercommercialandopensourcecompetitors.
AdditionalServices:Studentregistrationandenrollment,24x7
.
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WhyPresidium?
BlackboardhaspartneredwithPresidiumandresoldeLearningstudent/facultysupportsince2003
rongre a ons psex s across eorgan za on
Presidiumhelps
clients
to
deliver
results
Theirclientsout erformthemarketinever ma orbenchmarkofadministrativeeffectivenessandstudentsuccess
They
deliver
breakthroughs
in
cost
and
quality
for
their
BlackboardandPresidiumsharemanyclientsandhavesharedcontracts
Presidiumcurrently
provides
end
user
support
for
all
Blackboard
Collaborateclients
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The Blackboard
SolutionMichael Chasen, Chief Executive OfficerRay Henderson, President Bb Learn
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OurPlatforms
StrategicConsulting StudentServices&Support ManagedHosting
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BlackboardLearn
Allowsinstitutionstoputtheircoursesonlinetosupp ement
traditionalclasses
as
wellasofferfullyonlineprograms
Addonmodules
include:
ContentModule CommunityModule OutcomesModule
, 15
million
users
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BlackboardCollaborate
Enablesteacherstoholdsynchronouscourseson ne nc u ngc at,
whiteboard,audio
and
video
Addonmodulesinclude: InstantMessagingfor
Education VoiceModule
Over1,900clientsand6millionusers.
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BlackboardConnect
Disseminatescriticalinformationviavoice,ema , an text
messagesto
millions
of
usersinminutes
Addonmodulesinclude: ToolkitforTeachers
Over5 200clientsand26millionmessagerecipients
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BlackboardTransact
EnablesstudentsandfacultytouseaCampus
ar toaccess
facilitiesas
well
as
use
it
asadebitcardonandoffcampus
Addonmodulesinclude:
Access
Module OnlineCardOffice BbPay BbOne
million
cardholders
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BlackboardMobile
Deliverscampusservicesandcontenttomobile
ev ces nc u ng pp e
iPhone,iPod
Touch,
iPad,
BlackBerry,and Android
Productsinclude: BbMobileCentral
Bb
Mobile
Learn
Over160clientsandhundredsofthousandsofusers
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BlackboardStrategic Consulting
Adedicatedgroupofconsultantswithanexpert se ne ucat on
andtechnology
that
can
workwithyoutoexecuteyourvisionandcreatestrategiesthatgenerateimmediateresults.
Servicesinclude: StrategicConsulting TechnicalIntegration
andDeployment
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BlackboardManagedHosting
Providestoptierdatacentersandre un ant n rastructure,
deployingindustry
best
practicestoprovidescalabilityandsecurity. 99.9%uptime
guarantee
6Datacenters
2 000+servers Nearly2petabytes
enterprisefilestorage
Over940
clients
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BlackboardStudentServices&Support
Arangeofservicesandsupporttoprovide24/7tec n ca an process
assistanceto
students
andfaculty
Servicesinclude: eLearningSupport StudentLifecycle
Mana ementServices ITSupport
Over700clients
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Financial
OverviewJohn Kinzer, CFO
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BlackboardQ4&FY2010Guidance
Managementexpectstoreportfinancialresultsabovethemidpointofguidance providedonNovember3,2010subjecttothefinalization of our normal closin rocess and earend audit.
Management
will
discuss
the
detailed
financial
results
on
its
regularlyscheduledconferencecallonFebruary3,2011.
FourthQuarter2010
Revenueof$114.8millionto118.8
million
and
FY2010
Revenueof$444.4to$448.4million
NonGAAPadjustednetincomeperdilutedshareof$0.31to$0.35basedonanestimated35.2
NonGAAPadjustednetincomeperdilutedshareof$1.57to$1.61 basedonanestimated34.8
milliondiluted
shares.
million
diluted
shares;
and
Freecashflowfromoperations(cashflowfromoperationsless
24
equipment)of$80.0to$90.0
million.
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Blackboard2011GuidanceMetricsDefined
TobetterreflectBlackboardsoperatingperformance,wewillprovidethefollowingguidancemetricsin2011andbeyond.
eliminatedaspartofGAAPpurchaseaccountinguponacquisitionthatwould
haveotherwise
been
recognized.
NonGAAPnetincome&NonGAAPnetincomeperdilutedshare: Includesenon revenuea us men escr e a ovean exc u es rans on,
integrationandtransactionrelatedcostsresultingfromacquisitions,theamortizationorimpairmentofintangibleassets,stockbasedcompensation,
noncash
interest
expense
and
non
cash
translation
gains
or
losses;
all
net
of
taxes.
FreeCashFlow:Includescashflowfromoperationslesspurchasesofpropertyandequipment.
on evenuean on ne ncomegu ancew eprovidedasspecificnumbersandnotarange.
InadditiontoprovidingaGAAPtoNonGAAPreconciliationeach
25
quarter,wew prov eacompar sontot e onresultsforcomparabilitypurposes.
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BlackboardQ1&FY2011Guidance ManagementisprovidingNonGAAPrevenueandNonGAAP
earningsguidanceforQ1&FY2011,whichincludestheacquisitionofPresidiumInc.(seeAppendixforreconciliation)
FirstQuarter
2011
NonGAAPRevenueof$121.0FY
2011
NonGAAPRevenueof$540.0
NonGAAPnetincomeof$8.8million;
NonGAAP
net
income
per
diluted
NonGAAPnetincomeof$65.8million;
NonGAAP
net
income
per
diluted
s areo . 4 ase onanestimated35.9milliondilutedshares;and
EstimatednonGAAPeffectivetax
s areo 1.82 ase onanestimated36.2milliondilutedshares;
Estimated nonGAAP effective tax
rateof
approximately
40.0
percent.
rateof
approximately
37.0
percent;and Freecashflow(cashflowfrom
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opera ons esspurc asesopropertyandequipment)of$90.0
to$100.0
million.
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NonGAAPRevenue&EarningsBuild
Amountsinmillionsexceptpershareamounts2010GAAP(Mid
PointGuidance)
Revenue
Recognition
Change
Exclude
Impactof2010
Acquisitions =
2010NonGAAP
excluding
adjustments
(ColumnA) (Column
B) (Column
C) (Column
D)
Revenue $446.4 DefRev
$15.0 $13.9 $417.5
Operating
expenses 332.3 Merger
and
TS
COGS3.0 26.7 302.6AdjustedEBITDA $114.1 $12.0 ($12.8) $114.9
AdjustedEBITDAMargin 25.6% 27.5%NonGAAPnetincome $55.4 $7.3 ($8.7) $56.9
Weightedaveragenumberofdilutedshares 34.8 34.8 34.8 34.8
Blackboards2010financialswereimpactedbytheBlackboardTransactrevenuerecognitionchangerelatedtoASU1314(ColumnB)aswellas
NonGAAPnetincomeperdilutedshare 1.59 0.21 ( 0.25) 1.63
our2010
acquisitions
of
Saf
T
Net,
Elluminate
and
Wimba
(Column
C).
ColumnDillustrateswhatBlackboardscorebusinesswouldhavebeenexcluding theimpactofASU1314andour2010acquisitionsofSafTNet,
27
E uminate an Wim a.
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NonGAAPRevenue&EarningsBuild(cont.)(Column
D) (Column
E) (Column
F) (Column
G)
Amountsinmillionsexceptpershareamounts2010NonGAAP
excluding
adjustments >
2011Non
GAAPbefore
Acquisitions +2011Impactof
Acquisitions =2011NonGAAP
Standalone
Revenue $417.5 Def $463.6 $49.4 $513.0
RevenueGrowth 11%
Operatingexpenses 302.6 Me 332.5 41.0 373.5
AdjustedEBITDA $114.9 $131.1 $8.3 $139.5 . . . .NonGAAPnetincome $56.9 $65.5 $4.2 $69.6
Weightedaverage
number
of
diluted
shares 34.8
36.2
36.2
36.2
Blackboardexpectsthecorebusiness(ColumnD)togrowatapproximately11%andexpandmarginsapproximately80bpsin2011
NonGAAPnetincomeperdilutedshare $1.63 $1.81 $0.12 $1.92
(ColumnE).
InColumnFweaddthe2011financialimpactofour2010acquisitionsofSafTNet,Elluminate andWimba tothestandalonebusinesstoarriveat
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our inancia expectations or2011 exc u est eimpacto t ePresi iumacquisition).
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NonGAAPRevenue&EarningsBuild(cont.)(Column
G) (Column
H) (Column
I)
Amountsinmillionsexceptpershareamounts2011NonGAAP
Standalone +
Presidium
NonGAAP =
Blackboard
NonGAAP
. . .
Operatingexpenses 373.5 30.7 404.2
AdjustedEBITDA $139.5 ($3.7) $135.7
AdjustedEBITDAMargin 27.2% 25.1%NonGAAPnetincome $69.6 ($3.8) $65.8
Weightedaveragenumberofdilutedshares 36.2 36.2 36.2
Non
GAAP
net
income
per
diluted
share $1.92 ($0.10) $1.82
TheimpactofPresidium(ColumnH)isexpectedtobe$27millioninNonGAAPrevenueand($0.10)dilutiveto2011NonGAAPnetincomeper
dilutedshare.
The2011Presidiumresultsreflectinvestmentsinoperationsandtechnologytoscaletheoperationsforfuturegrowth.
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ManagementexpectsthatPresidiumgrowthwillacceleratein2012andbeslightlyaccretiveto2012NonGAAPnetincomeperdilutedshare.
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GAAPtoNonGAAPGuidanceReconciliationAmountsinmillionsexceptpershareamountsReconciliationofGAAPRevenuetoNonGAAPRevenue:
1Q2011 FY2011
GAAPRevenue $ 114.1 $ 526.7
Add:Deferredrevenuenotrecordedinpurchaseaccounting 6.9 13.3
Guidance
NonGAAPRevenue $ 121.0 $ 540.0
Reconciliationof
GAAP
net
(loss)
income
before
(benefit)
provision
for
income
taxes
to
non
GAAP
net
income:
1Q2011 FY2011
Guidance
GAAPnet(loss)incomebefore(benefit)provisionforincometaxes $ (11.5) $ 29.7
Add:Deferredrevenuenotrecordedinpurchaseaccounting 6.9 13.3
Add:Transition,integrationandtransactionrelatedexpenses 2.4 3.0
Add:Amortizationofintangiblesresultingfromacquisitions 9.2 32.0
Add:Stock
based
compensation
5.9
23.5
: oncas nterestexpense . .
Adjustedprovisionforincometaxes(1) (5.8) (38.8)
NonGAAPnetincome $ 8.6 $ 65.8
NonGAAPnetincomeperdilutedshare $ 0.24 $ 1.82
Weightedaveragenumberofdilutedshares 35.9 36.2
ReconciliationofFreeCashFlow: MidPointGuidan
(1)Assumes
an
estimated
GAAP
effective
tax
rate
of
approximately
34.0%
and
non
GAAP
adjustments
taxed
at
an
estimated
effectivetaxrateofapproximately37.0%resultinginanonGAAPeffectivetaxrateofapproximately40.0%and37.0%forthe
firstquarterof2011andfullyear2011,respectively.
FY2011
Cashflowfromoperations $ 120.0
Less:Purchasesofpropertyandequipment (25.0)
FreeCashFlow $ 95.0 31
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FinancialDefinitions
NonGAAPRevenue:IncludesdeferredrevenueofanacquiredentityeliminatedaspartofGAAPpurchaseaccountinguponacquisitionthatwouldhaveotherwisebeenrecognized.
AdjustedEBITDA:IncludesthenonGAAPrevenueadjustmentdescribedabove
and
excludes
transition,
integration,
and
transaction
related
costs
resultingfromacquisitions,interestincome,interestexpense,epreciationan amortization,stoc ase compensation,amortization
orimpairmentofintangibles,otherincome(expense)net,andincometaxes.
Non AAPNetIncome:Inc u est enon AAPrevenuea ustmentdiscussedaboveandexcludestransition,integration,andtransactionrelatedcostsresultingfromacquisitions,theamortizationorimpairmentof intan ible assets stockbased com ensation noncash interest
expense,and
non
cash
translation
gains
or
losses;
all
net
of
taxes.
FreeCashFlow:Includescashflowfromoperationslesspurchasesofro ert ande ui ment.
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