Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - BLUCORA, INC. | ex-991q12015.htm |
| 8-K - 8-K - BLUCORA, INC. | bcor8-kq12015earningsrelea.htm |
Exhibit 99.2
Blucora, Inc.
Supplemental Information
March 31, 2015
Table of Contents
Blucora Consolidated Financial Results
(in thousands except %s and net income per share, rounding differences may exist)
2013 | 2014 | 2015 | ||||||||||||||||||||||||||
FY 12/31 | 1Q | 2Q | 3Q | 4Q | FY 12/31 | 1Q | ||||||||||||||||||||||
Segment Revenue | ||||||||||||||||||||||||||||
Search and Content (1) | $ | 428,464 | $ | 106,765 | $ | 79,818 | $ | 74,416 | $ | 65,271 | $ | 326,270 | $ | 58,746 | ||||||||||||||
Tax Preparation (2) | 91,213 | 72,279 | 26,452 | 2,469 | 2,519 | 103,719 | 81,068 | |||||||||||||||||||||
E-Commerce (3) | 54,303 | 37,139 | 35,299 | 37,970 | 40,323 | 150,731 | 35,012 | |||||||||||||||||||||
Total | $ | 573,980 | $ | 216,183 | $ | 141,569 | $ | 114,855 | $ | 108,113 | $ | 580,720 | $ | 174,826 | ||||||||||||||
Segment Income (Loss) (4) | ||||||||||||||||||||||||||||
Search and Content (1) | $ | 82,504 | $ | 19,230 | $ | 14,032 | $ | 12,709 | $ | 9,841 | $ | 55,812 | $ | 8,398 | ||||||||||||||
Tax Preparation (2) | 40,599 | 37,402 | 17,211 | (1,859 | ) | (3,058 | ) | 49,696 | 44,145 | |||||||||||||||||||
E-Commerce (3) | 4,967 | 3,478 | 2,378 | 3,336 | 2,851 | 12,043 | 2,562 | |||||||||||||||||||||
Total | $ | 128,070 | $ | 60,110 | $ | 33,621 | $ | 14,186 | $ | 9,634 | $ | 117,551 | $ | 55,105 | ||||||||||||||
Segment Income (Loss) % of Revenue | ||||||||||||||||||||||||||||
Search and Content | 19 | % | 18 | % | 18 | % | 17 | % | 15 | % | 17 | % | 14 | % | ||||||||||||||
Tax Preparation | 45 | % | 52 | % | 65 | % | (75 | )% | (121 | )% | 48 | % | 54 | % | ||||||||||||||
E-Commerce | 9 | % | 9 | % | 7 | % | 9 | % | 7 | % | 8 | % | 7 | % | ||||||||||||||
Total | 22 | % | 28 | % | 24 | % | 12 | % | 9 | % | 20 | % | 32 | % | ||||||||||||||
Unallocated Corporate Operating Expense (4) | $ | 13,829 | (5) | $ | 3,222 | $ | 3,833 | $ | 3,524 | $ | 4,037 | $ | 14,616 | $ | 4,257 | |||||||||||||
Adjusted EBITDA | $ | 114,241 | $ | 56,888 | $ | 29,788 | $ | 10,662 | $ | 5,597 | $ | 102,935 | $ | 50,848 | ||||||||||||||
Other Unallocated (4) | ||||||||||||||||||||||||||||
Stock-based compensation | $ | 11,527 | (6) | $ | 3,408 | $ | 2,958 | (7) | $ | 2,608 | $ | 2,910 | $ | 11,884 | $ | 2,699 | ||||||||||||
Depreciation | 4,476 | 1,395 | 1,414 | 1,385 | 1,387 | 5,581 | 1,462 | |||||||||||||||||||||
Amortization of intangible assets | 23,789 | 7,469 | 7,642 | (8) | 7,993 | 7,990 | 31,094 | 7,980 | ||||||||||||||||||||
Impairment of goodwill and intangible assets | — | — | — | — | 62,817 | (9) | 62,817 | — | ||||||||||||||||||||
Interest income | (300 | ) | (108 | ) | (88 | ) | (71 | ) | (85 | ) | (352 | ) | (118 | ) | ||||||||||||||
Interest expense | 9,463 | 3,015 | 2,764 | 2,706 | 2,717 | 11,202 | 2,768 | |||||||||||||||||||||
Amortization of debt issuance costs | 1,108 | 281 | 284 | 288 | 290 | 1,143 | 348 | |||||||||||||||||||||
Accretion of debt discounts | 2,838 | 906 | 916 | 931 | 938 | 3,691 | 1,131 | |||||||||||||||||||||
Loss on debt extinguishment and modification expense | 1,593 | — | — | — | — | — | — | |||||||||||||||||||||
Loss on derivative instrument | 11,652 | (10) | — | — | — | — | — | — | ||||||||||||||||||||
Impairment of equity investment in privately-held company | 3,711 | — | — | — | — | — | — | |||||||||||||||||||||
Other income, net | (442 | ) | (25 | ) | (152 | ) | (646 | ) | (95 | ) | (918 | ) | (403 | ) | ||||||||||||||
Total | $ | 69,415 | $ | 16,341 | $ | 15,738 | $ | 15,194 | $ | 78,869 | $ | 126,142 | $ | 15,867 | ||||||||||||||
Income (Loss) Before Taxes | $ | 44,826 | $ | 40,547 | $ | 14,050 | $ | (4,532 | ) | $ | (73,272 | ) | $ | (23,207 | ) | $ | 34,981 | |||||||||||
Income Tax (Benefit) Expense | ||||||||||||||||||||||||||||
Cash | $ | 1,888 | $ | 2,241 | $ | 1,435 | $ | (277 | ) | $ | (604 | ) | $ | 2,795 | $ | 3,481 | ||||||||||||
Non-cash (11) | 18,539 | 12,319 | 3,878 | (2,017 | ) | (4,635 | ) | 9,545 | 8,400 | |||||||||||||||||||
Total | $ | 20,427 | $ | 14,560 | $ | 5,313 | $ | (2,294 | ) | $ | (5,239 | ) | $ | 12,340 | $ | 11,881 | ||||||||||||
GAAP Net Income (Loss) | $ | 24,399 | $ | 25,987 | $ | 8,737 | $ | (2,238 | ) | $ | (68,033 | ) | $ | (35,547 | ) | $ | 23,100 | |||||||||||
GAAP Net Income (Loss) Per Share - diluted | $ | 0.56 | $ | 0.58 | $ | 0.20 | $ | (0.05 | ) | $ | (1.67 | ) | $ | (0.86 | ) | $ | 0.55 | |||||||||||
Non-GAAP Net Income | $ | 97,694 | $ | 50,003 | $ | 23,908 | $ | 6,544 | $ | 1,969 | $ | 82,424 | $ | 42,977 | ||||||||||||||
Non-GAAP Net Income Per Share - diluted | $ | 2.25 | $ | 1.12 | $ | 0.55 | $ | 0.15 | (12) | $ | 0.05 | (13) | $ | 1.92 | (14 | ) | $ | 1.03 | ||||||||||
Outstanding Shares | 42,083 | 42,203 | 41,039 | 40,977 | 40,882 | 40,882 | 40,851 | |||||||||||||||||||||
Basic Shares - GAAP | 41,201 | 42,162 | 41,570 | 41,034 | 40,820 | 41,396 | 40,987 | |||||||||||||||||||||
Diluted Shares - GAAP | 43,480 | 44,521 | 43,084 | 41,034 | 40,820 | 41,396 | 41,899 | |||||||||||||||||||||
Cash & Short-term Investments | $ | 333,705 | $ | 336,390 | $ | 278,620 | $ | 280,394 | $ | 301,298 | $ | 301,298 | $ | 311,440 | ||||||||||||||
Outstanding Debt - Principal Amount | 322,634 | 278,634 | 266,634 | 264,634 | 295,190 | 295,190 | 256,190 | |||||||||||||||||||||
Net Cash | $ | 11,071 | $ | 57,756 | $ | 11,986 | $ | 15,760 | $ | 6,108 | $ | 6,108 | $ | 55,250 | ||||||||||||||
Notes to Consolidated Financial Results on next page
2
Notes to Consolidated Financial Results
(1) | On May 30, 2014, we acquired HowStuffWorks ("HSW"). The Search and Content segment, formerly known as the Search segment, includes the financial results of HSW beginning on May 30, 2014. |
(2) | On January 31, 2012, we acquired TaxACT, Inc. As a highly seasonal business, almost all of the TaxACT revenue is generated in the first four months of the calendar year. |
(3) | On August 22, 2013, we acquired Monoprice, Inc. Amounts for 2013 represented the results of operations for the Monoprice business from August 22, 2013 to December 31, 2013. |
(4) | We do not allocate certain general and administrative costs (including personnel and overhead costs), stock-based compensation, depreciation, amortization of intangible assets, impairment of goodwill and intangible assets, other income/loss, net, or income taxes to the reportable segments. The general and administrative costs are included in Unallocated Corporate Operating Expense. |
(5) | Amount in 2013 included $0.6 million in transaction costs related to the Monoprice acquisition. |
(6) | Amount in 2013 included $0.5 million in stock-based compensation recorded in association with the vesting of performance-based stock options upon completion of the Monoprice acquisition. |
(7) | Amount in 2Q14 included $0.3 million in stock-based compensation recorded in association with the vesting of performance-based stock options upon completion of the HSW acquisition. |
(8) | Amount in 2Q14 included $0.2 million related to amortization of acquired intangible assets related to the HSW acquisition. |
(9) | In 4Q14, we recognized an impairment of goodwill and trade name intangible assets related to our E-Commerce segment. |
(10) | Warrant was exercised during 4Q13. |
(11) | Amounts represent the non-cash portion of income taxes from continuing operations. We exclude the non-cash portion of income taxes because of our ability to offset a substantial portion of our cash tax liabilities by using deferred tax assets, which primarily consist of U.S. federal net operating losses. The majority of these deferred tax assets will expire, if unutilized, between 2020 and 2024. |
(12) | Calculation in 3Q14 used 42,305,000 diluted shares due to non-GAAP net income. |
(13) | Calculation in 4Q14 used 41,875,000 diluted shares due to non-GAAP net income. |
(14) | Calculation in FY 2014 used 42,946,000 diluted shares due to non-GAAP net income. |
3
Blucora Reconciliation of Non-GAAP Financial Measures (1)
(in thousands except net income per share, rounding differences may exist)
2013 | 2014 | 2015 | |||||||||||||||||||||||||
FY 12/31 | 1Q | 2Q | 3Q | 4Q | FY 12/31 | 1Q | |||||||||||||||||||||
Adjusted EBITDA | |||||||||||||||||||||||||||
Net income (loss) (2) | $ | 24,399 | $ | 25,987 | $ | 8,737 | $ | (2,238 | ) | $ | (68,033 | ) | $ | (35,547 | ) | $ | 23,100 | ||||||||||
Stock-based compensation | 11,527 | 3,408 | 2,958 | 2,608 | 2,910 | 11,884 | 2,699 | ||||||||||||||||||||
Depreciation and amortization of intangible assets | 28,265 | 8,864 | 9,056 | 9,378 | 9,377 | 36,675 | 9,442 | ||||||||||||||||||||
Impairment of goodwill and intangible assets | — | — | — | — | 62,817 | 62,817 | — | ||||||||||||||||||||
Other loss, net (3) | 29,623 | 4,069 | 3,724 | 3,208 | 3,765 | 14,766 | 3,726 | ||||||||||||||||||||
Income tax (benefit) expense | 20,427 | 14,560 | 5,313 | (2,294 | ) | (5,239 | ) | 12,340 | 11,881 | ||||||||||||||||||
Adjusted EBITDA (4) | $ | 114,241 | $ | 56,888 | $ | 29,788 | $ | 10,662 | $ | 5,597 | $ | 102,935 | $ | 50,848 | |||||||||||||
Non-GAAP Net Income | |||||||||||||||||||||||||||
Net income (loss) (2) | $ | 24,399 | $ | 25,987 | $ | 8,737 | $ | (2,238 | ) | $ | (68,033 | ) | $ | (35,547 | ) | $ | 23,100 | ||||||||||
Stock-based compensation | 11,527 | 3,408 | 2,958 | 2,608 | 2,910 | 11,884 | 2,699 | ||||||||||||||||||||
Amortization of acquired intangible assets | 23,789 | 7,469 | 7,642 | 7,993 | 7,990 | 31,094 | 7,980 | ||||||||||||||||||||
Impairment of goodwill and intangible assets | — | — | — | — | 62,817 | 62,817 | — | ||||||||||||||||||||
Accretion of debt discount on Convertible Senior Notes | 2,674 | 874 | 890 | 907 | 923 | 3,594 | 940 | ||||||||||||||||||||
Loss on debt extinguishment and modification expense | 1,593 | — | — | — | — | — | — | ||||||||||||||||||||
Loss on derivative instrument | 11,652 | — | — | — | — | — | — | ||||||||||||||||||||
Impairment of equity investment in privately-held company | 3,711 | — | — | — | — | — | — | ||||||||||||||||||||
Decrease in non-cash pre-acquisition liability | — | — | — | (665 | ) | — | (665 | ) | — | ||||||||||||||||||
Cash tax impact of adjustments to GAAP net income | (189 | ) | (54 | ) | (197 | ) | (44 | ) | (3 | ) | (298 | ) | (142 | ) | |||||||||||||
Non-cash income tax (benefit) expense (1) | 18,538 | 12,319 | 3,878 | (2,017 | ) | (4,635 | ) | 9,545 | 8,400 | ||||||||||||||||||
Non-GAAP net income (5) | $ | 97,694 | $ | 50,003 | $ | 23,908 | $ | 6,544 | $ | 1,969 | $ | 82,424 | $ | 42,977 | |||||||||||||
Non-GAAP net income per share | $ | 2.25 | $ | 1.12 | $ | 0.55 | $ | 0.15 | $ | 0.05 | $ | 1.92 | $ | 1.03 | |||||||||||||
Diluted shares | 43,480 | 44,521 | 43,084 | 42,305 | 41,875 | 42,946 | 41,899 | ||||||||||||||||||||
(1) | For definitions of these non-GAAP financial measures and their relationship to our GAAP financial statements, please see Note 1 to our Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures in exhibit 99.1 to the April 30, 2015 Current Report on Form 8-K. |
(2) | As presented in the Preliminary Condensed Consolidated Statements of Operations (unaudited). |
(3) | Other loss, net primarily includes items such as interest income, interest expense, amortization of debt issuance costs, accretion of debt discounts, loss on debt extinguishment and modification expense, loss on derivative instrument, other-than-temporary impairment loss on equity investments, adjustments to contingent liabilities related to business combinations, and gain on third party bankruptcy settlement. |
(4) | We define Adjusted EBITDA differently effective with 4Q14 to include impairment of goodwill and intangible assets. Our new definition of Adjusted EBITDA did not impact presentation of this non-GAAP financial measure for prior periods. |
(5) | We define Non-GAAP net income differently effective with 1Q13 to include accretion of debt discount on Convertible Senior notes, 3Q13 to include other-than-temporary impairment losses on equity investments and loss on debt extinguishment and modification expense, 3Q14 to include decrease in non-cash pre-acquisition liability, and 4Q14 to include impairment of goodwill and intangible assets. Our new definition of non-GAAP net income did not impact presentation of this non-GAAP financial measure for prior periods. |
4
Blucora Reconciliation of Operating Free Cash Flow (1)
(in thousands, rounding differences may exist)
Last twelve months ended | |||||||||||||||||||
March 31, 2014 | June 30, 2014 | September 30, 2014 | December 31, 2014 | March 31, 2015 | |||||||||||||||
Net cash provided by operating activities | $ | 89,852 | $ | 81,130 | $ | 79,529 | $ | 55,734 | $ | 57,328 | |||||||||
Excess tax benefits from stock-based award activity (2) | 34,301 | 36,733 | 34,605 | 23,284 | 26,402 | ||||||||||||||
Purchases of property and equipment | (4,451 | ) | (5,559 | ) | (5,928 | ) | (5,213 | ) | (4,968 | ) | |||||||||
Operating free cash flow | $ | 119,702 | $ | 112,304 | $ | 108,206 | $ | 73,805 | $ | 78,762 | |||||||||
(1) | We define operating free cash flow as net cash provided by operating activities plus the excess tax benefits from stock-based award activity and less purchases of property and equipment. We believe operating free cash flow is an important liquidity measure that reflects the cash generated by the business after the purchase of property and equipment that can then be used for, among other things, strategic acquisitions and investments in the business, stock repurchases, and funding ongoing operations. |
(2) | The significant majority of excess tax benefits from stock-based award activity represents the utilization of equity net operating loss carryforwards from prior years. |
5
Blucora Operating Metrics - Search and Content
2013 | 2014 | 2015 | ||||||||||||||||||
Revenue by source | FY 12/31 | 1Q | 2Q | 3Q | 4Q | FY 12/31 | 1Q | |||||||||||||
Owned & Operated (B2C) | 17 | % | 22 | % | 17 | % | 21 | % | 26 | % | 21 | % | 34 | % | ||||||
Distribution (B2B) | 83 | % | 78 | % | 83 | % | 79 | % | 74 | % | 79 | % | 66 | % | ||||||
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Blucora Operating Metrics - Tax Preparation
(in thousands except %s, rounding differences may exist)
Tax seasons ended April 16, | Three months ended March 31, | ||||||||||||||||
Consumer e-files | 2015 | 2014 | % change | 2015 | 2014 | % change | |||||||||||
Online e-files | 5,058 | 5,067 | — | 3,908 | 4,022 | (3 | )% | ||||||||||
Desktop e-files | 261 | 246 | 6 | % | 179 | 174 | 3 | % | |||||||||
Sub-total e-files | 5,319 | 5,313 | — | 4,087 | 4,196 | (3 | )% | ||||||||||
Free File Alliance e-files (1) | 172 | 210 | (18 | )% | 127 | 166 | (23 | )% | |||||||||
Total e-files | 5,491 | 5,523 | (1 | )% | 4,214 | 4,362 | (3 | )% | |||||||||
(1) | Free File Alliance e-files are provided as part of an IRS partnership that provides free electronic tax filing services to taxpayers meeting certain income-based guidelines. |
7
Blucora Operating Metrics - E-Commerce
2014 | 2015 | ||||||||||||||||
1Q | 2Q | 3Q | 4Q | FY 12/31 | 1Q | ||||||||||||
Order numbers % change (1) | (2 | )% | (7 | )% | (5 | )% | (5 | )% | (5 | )% | (12 | )% | |||||
(1) | Figures represent decrease in order numbers as compared to the comparable prior period. |
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