bbb investor ppt 2010_2011

8/3/2019 BBB Investor PPT 2010_2011

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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.

2


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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

5


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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

6


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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

7


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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.

10

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

26

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

28

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.

29

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.

33

bbb investor ppt 2010_2011

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