SEC Comment Letter for BLACKBAUD INC (BLKB) (CIK 0001280058) (BLKB) — Oct 20, 2011
BLACKBAUD INC (BLKB) (CIK 0001280058)
Date: Oct. 20, 2011 · CIK: 0001280058 · Accession: 0000000000-11-061665
AI Filing Summary & Sentiment
File numbers found in text: 000-50600
Referenced dates: July 29, 2011
Letter
October 20, 2011 Via Facsimile Marc E. Chardon Chief Executive Officer Blackbaud, Inc. 2000 Daniel Island Drive Charleston, South Carolina 29492 Re: Blackbaud, Inc. Form 10-K for the fiscal year ended December 31, 2010 Filed March 1, 2011 Form 10-Q for the quarterly period ended June 30, 2011 Filed August 9, 2011 File No. 000-50600
Dear Mr. Chardon: We have reviewed your letter dated A ugust 24, 2011 in connection with the above- referenced filings and have the following comm ents. In our comments, we may ask you to provide us with information so we may better understand your disclosure. Please respond to this letter within ten business days by amending your filing, by providing the requested information, or by advi sing us when you will provide the requested response. If you do not believe our comments apply to your fact s and circumstances or do not believe an amendment is appropriate, pl ease tell us why in your response. After reviewing any amendment to your filing and the information you provide in response to these comments, we may have addi tional comments. Unless otherwise noted, where prior comments are referred to they re fer to our letter dated July 29, 2011. Form 10-K for the fiscal year ended December 31, 2010
Consolidated Financial Statements
Note 1. Organization and Si gnificant Accounting Policies
Revenue Recognition, page F-7
1. We note your response to prior comment 1. Please further clarify why you believe the contract service period is the appropriate pe riod over which the customer benefits from the payment of the set-up fees in the hos ting subscription arrangements. Explain in
Marc E. Chardon Blackbaud, Inc. October 20, 2011 Page 2 greater detail how you considered the guidan ce in SAB Topic 13.A.3(f). Provide us with an analysis of your renewal experience to da te for your subscription-based offerings with terms ranging between 12 to 36 months. Compensation Discussion and Analysis (incorpora ted from the definitive proxy statement filed
on April 29, 2011) Employment Agreements
Messrs. Williams, Attanasi, Cumbaa and Mooney, page 38
2. We have reviewed your at-will employment ag reements with Messrs. Williams, Attanasi, Cumbaa and Mooney, which you filed supplemen tally with us in response to prior comment 2. The agreements appear to be ma nagement contracts between you and four of your named executive officers and, thus, should be filed as exhibits pursuant to Item 601(b)(10)(iii)(A) of Regul ation S-K, which provides that “Any management contract…in which any director or any of the named executive officers of the registrant…participates shall be deemed material and shall be filed.” Also, although the agreements may follow your basic form of empl oyment agreement, they do not appear to include the details of any specific compen sation plans that provide benefits to management and non-management participants an d, therefore, they do not appear to fall under the exception provided by Item 601(b)(10)( iii)(C)(4). Accordingly, please file the employment agreements with Messrs. Williams, Attanasi, Cumbaa and Mooney as exhibits to your next periodic report. Form 10-Q for the quarterly period ended June 30, 2011
Consolidated Financial Statements
Note 3. Business combinations, page 8
3. Your response to prior comment 4 indicates th at the acquired software represents a lower than normal percentage of the valuation allocation because the acquired software technology is on an outdated platform that a market participant would be required to update to make useful. Explain why a grea ter portion of the purchase price was not allocated to the acquired software since it appears to contain the technology and established process for delivering list an alytic and data management services.
4. We note your response to prior comment 5. E xplain in greater detail how you determined that the customer relationships have a useful life of 15 years. In this respect, tell us how you determined that 15 years is the period over which the customer relationships are expected to contribute directly or indirectly to your future cash flows. As part of your
Marc E. Chardon Blackbaud, Inc. October 20, 2011 Page 3 response, provide us with an analysis of a ll the pertinent factors you considered including each of the factors outlined in ASC 350- 30-35-3.
You may contact Morgan Youngwood at (202) 551-3479, if you have questions regarding comments on the financia l statements and related matte rs. If you have any other questions, please contact Matthew Crispino, at (202) 551-3456 or Barbara Jacobs, Assistant Director at (202) 551-3730. If you require further assistance, do not hesitate to contact me at (202) 551-3730. Sincerely,
Craig Wilson Senior Assistant Chief Accountant
Show Raw Text
October 20, 2011
Via Facsimile
Marc E. Chardon Chief Executive Officer Blackbaud, Inc. 2000 Daniel Island Drive Charleston, South Carolina 29492
Re: Blackbaud, Inc.
Form 10-K for the fiscal year ended December 31, 2010
Filed March 1, 2011 Form 10-Q for the quarterly period ended June 30, 2011 Filed August 9, 2011 File No. 000-50600
Dear Mr. Chardon:
We have reviewed your letter dated A ugust 24, 2011 in connection with the above-
referenced filings and have the following comm ents. In our comments, we may ask you to
provide us with information so we may better understand your disclosure.
Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response. If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.
After reviewing any amendment to your filing and the information you provide in
response to these comments, we may have addi tional comments. Unless otherwise noted, where
prior comments are referred to they re fer to our letter dated July 29, 2011.
Form 10-K for the fiscal year ended December 31, 2010
Consolidated Financial Statements
Note 1. Organization and Si gnificant Accounting Policies
Revenue Recognition, page F-7
1. We note your response to prior comment 1. Please further clarify why you believe the
contract service period is the appropriate pe riod over which the customer benefits from
the payment of the set-up fees in the hos ting subscription arrangements. Explain in
Marc E. Chardon Blackbaud, Inc. October 20, 2011 Page 2
greater detail how you considered the guidan ce in SAB Topic 13.A.3(f). Provide us with
an analysis of your renewal experience to da te for your subscription-based offerings with
terms ranging between 12 to 36 months.
Compensation Discussion and Analysis (incorpora ted from the definitive proxy statement filed
on April 29, 2011)
Employment Agreements
Messrs. Williams, Attanasi, Cumbaa and Mooney, page 38
2. We have reviewed your at-will employment ag reements with Messrs. Williams, Attanasi,
Cumbaa and Mooney, which you filed supplemen tally with us in response to prior
comment 2. The agreements appear to be ma nagement contracts between you and four of
your named executive officers and, thus, should be filed as exhibits pursuant to Item
601(b)(10)(iii)(A) of Regul ation S-K, which provides that “Any management
contract…in which any director or any of the named executive officers of the
registrant…participates shall be deemed material and shall be filed.” Also, although the
agreements may follow your basic form of empl oyment agreement, they do not appear to
include the details of any specific compen sation plans that provide benefits to
management and non-management participants an d, therefore, they do not appear to fall
under the exception provided by Item 601(b)(10)( iii)(C)(4). Accordingly, please file the
employment agreements with Messrs. Williams, Attanasi, Cumbaa and Mooney as exhibits to your next periodic report.
Form 10-Q for the quarterly period ended June 30, 2011
Consolidated Financial Statements
Note 3. Business combinations, page 8
3. Your response to prior comment 4 indicates th at the acquired software represents a lower
than normal percentage of the valuation allocation because the acquired software technology is on an outdated platform that a market participant would be required to
update to make useful. Explain why a grea ter portion of the purchase price was not
allocated to the acquired software since it appears to contain the technology and
established process for delivering list an alytic and data management services.
4. We note your response to prior comment 5. E xplain in greater detail how you determined
that the customer relationships have a useful life of 15 years. In this respect, tell us how
you determined that 15 years is the period over which the customer relationships are
expected to contribute directly or indirectly to your future cash flows. As part of your
Marc E. Chardon Blackbaud, Inc. October 20, 2011 Page 3
response, provide us with an analysis of a ll the pertinent factors you considered including
each of the factors outlined in ASC 350-
30-35-3.
You may contact Morgan Youngwood at (202) 551-3479, if you have questions
regarding comments on the financia l statements and related matte rs. If you have any other
questions, please contact Matthew Crispino, at (202) 551-3456 or Barbara Jacobs, Assistant
Director at (202) 551-3730. If you require further assistance, do not hesitate to contact me at
(202) 551-3730.
Sincerely,
Craig Wilson Senior Assistant Chief Accountant