BLACKBAUD INC Q3 FY2011 earnings

Blackbaud had a quarter of significant activity on the cash flow front, driven largely by increased operating cash flow and higher spending on investments. With operating cash flow hitting $67.7 million for the first nine months of 2011, this represented an $18.8 million increase compared to the same period in the previous year. The boost in cash flow was notably supported by a $7.3 million net increase from working capital changes, highlighting a $1.7 million rise in collections due to timing and a $6 million income tax refund. There was also a $1.7 million uptick in cash flow related to the provision for doubtful accounts, attributable to increased credits from burgeoning service sales.

On the investment side, Blackbaud spent $28.6 million in the initial nine months of 2011, which was double the prior year's comparable period, mainly due to the acquisition of PIDI and significant investments in software and equipment. The company plans to continue this level of capital expenditure, projected to range between $15 million and $20 million for the full year 2011.

The financing cash flows depicted a restrain as only $14.4 million was used in financing activities between January and September 2011, a notable decrease from the $32.4 million in 2010, largely owing to the suspension of treasury stock purchases. Regardless, $50 million remains invisible under the current share repurchase program, reflecting a potential future cash deployment.

Notably absent were any updates on new or emphasized risks, leaving a blank slate on that front for this quarter. This may indicate stability in Blackbaud's risk profile, at least as the management perceives it publicly.

Overall, Blackbaud's quarter showcases a company focused on redirecting cash from financing into operations and growth investments efficiently, while maintaining flexibility against potential future cash needs, especially given their significant funds overseas which remain unrepatriated at this point due to tax considerations.