Business Headlines

Blackboard Inc. Reports Second Quarter Revenue of $92.1 Million

Revenue Increases 22 Percent Year-Over-Year
   
WASHINGTON, Aug. 5, 2009/VIA PRNewswire-FirstCall/ -- Blackboard Inc. (Nasdaq: BBBB) today announced financial results for the second quarter ended June 30, 2009 and updated guidance for the third quarter and the full year of 2009.

Total revenue for the quarter ended June 30, 2009 was $92.1 million, an increase of 22 percent over the second quarter of 2008. Product revenues for the quarter were $83.4 million, an increase of 22 percent over the second quarter of 2008, while professional services revenues for the quarter were $8.7 million, an increase of 22 percent over the second quarter of 2008. The increase in revenue was driven by strong growth in Blackboard's professional services and managed hosting. The financial results for the second quarter reflect the inclusion of ANGEL Learning, Inc. beginning May 9, 2009.

GAAP net loss was $4.1 million, resulting in net loss per basic and diluted share of ($0.13) for the second quarter of 2009 compared to a net loss of $134,000 and net loss per basic and diluted share of ($0.00) for the second quarter of 2008. Non-GAAP adjusted net income for the second quarter of 2009, which excludes the amortization of acquisition-related intangible assets, stock-based compensation, non-cash patent related impairment charge, and non-cash interest expense, all net of taxes, was $8.7 million, resulting in non-GAAP adjusted net income per diluted share of $0.27 compared to non-GAAP adjusted net income of $9.2 million and non-GAAP adjusted net income per diluted share of $0.29 for the second quarter of 2008.

Impact of Certain Items on 2009 Second Quarter Results
Included in the second quarter 2009 GAAP net loss and non-GAAP net income is a $3.5 million one-time charge related to the reversal of a 2008 patent judgment. In addition, included in the second quarter 2009 GAAP net loss, but excluded from non-GAAP net income, is a $7.5 million one-time non-cash charge resulting from an impairment to capitalized patent costs. Also included in the results for the second quarter of 2009 is a $1.1 million benefit to other income (GAAP and Non-GAAP) from a gain on investment in a common stock warrant held by the Company. The net impact of these items results in a $0.21 reduction in GAAP net income per basic and diluted share and a $0.06 reduction in non-GAAP net income per diluted share for the quarter ended June 30, 2009.

"We are pleased with our financial results in the second quarter which, excluding the impact of the litigation-related charges and our investment gain, exceeded our prior financial guidance. We experienced solid demand for our products and services during the quarter and continue to believe that spending on education technology remains a priority, even in the current economic environment," said Michael Chasen, CEO and President of Blackboard Inc. "With the addition of ANGEL Learning and the launch of our new mobile application platform, MobilEdu, we are expanding our business and product offerings and strengthening our overall position."

Highlights from the Second Quarter of 2009
--  A few of Blackboard's new and expanded client relationships in the quarter included:
        --  U.S. Higher Education: Albany State University, Bishop State
            Community College, Black Hills State University Carlow University,
            Chemeketa Community College, Georgia Gwinnett College, Ivy Tech
            Community College, Marshall University, Marygrove College,
            Mississippi Association of Community and Junior Colleges, Nova
            Southeastern University, Rowan University, The College of St.
            Scholastica, University of Nebraska-Lincoln, University of
            Southern California, University of Southern Mississippi and
            others.
        --  International: Charles Darwin University, Curtain University of
            Technology, DUOC, Emmanuel Schools Foundation, National College of
            Puerto Rico, Northampton University, Saxion Hogeschool, Swinburne
            University, Taiwan American School, University Arts London,
            University of Puerto Rico, Utrecht University and others.
        --  K-12: Broward County Public School, Clay County School District,
            Clear Creek Independent School District, Cobb County School
            District, Fulton County Public Schools, Hamilton/Clermont
            Cooperative Association, Jefferson County Public Schools, KC
            Distance Learning, North Carolina Virtual Public School, Saskatoon
            Public School District, Sioux Falls School District and others.
        --  Professional Education (ProEd): Administrative Office of the U.S.
            Courts, Air Force Special Operations School, American University
            of Antigua College, Cadet Command, Carilion Health Systems, Civil
            Air Patrol, Innova World Wide Institute, Institute of Nuclear
            Power Operations, Laboratory Institute of Merchandising, Medela,
            Inc., Naval War College, Northern Virginia Criminal Justice
            Training Academy, PIMA Medical Institute, Substance Abuse & Mental
            Health Services and others.
        --  Blackboard completed its acquisition of ANGEL Learning, Inc., a
            leading developer of e-learning software to the U.S. education
            industry, for approximately $95 million, net of cash acquired and
            excluding transaction costs.

Outlook for the Third Quarter and Full Year of 2009
Third Quarter of 2009:
    --  Revenue of $95.0 to $98.0 million;
    --  Stock-based compensation expense of approximately $4.2 million;
    --  Amortization of acquired intangibles of approximately $9.2 million;
    --  GAAP net income of $1.2 million to $3.3 million;
    --  GAAP net income per diluted share of $0.04 to $0.10, which is based on
        an estimated 32.9 million diluted shares, and an estimated effective
        tax rate of approximately 33 percent;
    --  Non-GAAP adjusted net income of $10.7 to $12.8 million, which excludes
        the amortization of acquisition-related intangible assets, stock-based
        compensation, and non-cash interest expense, all net of taxes; and
    --  Non-GAAP adjusted net income per diluted share of $0.33 to $0.39 based
        on an estimated 32.9 million diluted shares and an estimated effective
        tax rate of approximately 37 percent.

Full Year 2009:
    --  Revenue of $369.0 to $375.0 million;
    --  Stock-based compensation expense of approximately $16.1 million;
    --  Amortization of acquired intangibles of approximately $34.9 million;
    --  GAAP net income of $700,000 to $4.7 million;
    --  GAAP net income per diluted share of $0.02 to $0.15, which is based on
        an estimated 32.7 million diluted shares; and an estimated effective
        tax rate of approximately 33 percent;
    --  Non-GAAP adjusted net income of $41.0 to $45.1 million, which excludes
        the amortization of acquisition-related intangible assets, stock-based
        compensation, non-cash interest expense, and non-cash patent related
        impairment charge, all net of taxes;
    --  Non-GAAP adjusted net income per diluted share of $1.26 to $1.38 based
        on an estimated 32.7 million diluted shares and an estimated effective
        tax rate of approximately 38 percent; and
    --  Cash flow from operations of $90.0 to $100.0 million.

Conference Call
Blackboard will broadcast its second quarter conference call live over the Internet today beginning at 4:30 p.m. (Eastern). Interested parties can access the webcast through the Investor Relations section of the Company's Web site at http://investor.blackboard.com.

A replay of the call will be available via telephone at approximately 7:00 p.m. (ET) on August 6, 2009. To listen to the replay, participants in the U.S. and Canada should dial 888-286-8010, and international participants should dial +1 (617) 801-6888. The conference ID for the replay is 74196349.