Attached files
| file | filename |
|---|---|
| 8-K - 8-K - BLUCORA, INC. | bcor8-kq42015earningsrelea.htm |
| EX-99.1 - EXHIBIT 99.1 - BLUCORA, INC. | ex-991earningsreleaseq42015.htm |
Exhibit 99.2
Blucora, Inc.
Supplemental Information
December 31, 2015
Table of Contents
Pro Forma Financial Information | |
Operating Metrics | |
As Reported Financial Information | |
Pro Forma - Blucora Consolidated Financial Results (1)
2014 | 2015 | |||||||||||||||||||||||
(in thousands except %s and per share amounts, rounding differences may exist) | FY 12/31 | 1Q | 2Q | 3Q | 4Q | FY 12/31 | ||||||||||||||||||
Segment Revenue | ||||||||||||||||||||||||
Wealth Management (2) | $ | 304,854 | $ | 76,795 | $ | 80,834 | $ | 79,977 | $ | 82,133 | $ | 319,739 | ||||||||||||
Tax Preparation | 103,719 | 81,068 | 30,900 | 2,875 | 2,865 | 117,708 | ||||||||||||||||||
Total | $ | 408,573 | $ | 157,863 | $ | 111,734 | $ | 82,852 | $ | 84,998 | $ | 437,447 | ||||||||||||
Segment Income (Loss) | ||||||||||||||||||||||||
Wealth Management (2) | $ | 40,314 | $ | 8,647 | $ | 10,617 | $ | 11,488 | $ | 12,245 | $ | 42,997 | ||||||||||||
Tax Preparation | 49,696 | 44,145 | 19,890 | (2,542 | ) | (4,509 | ) | 56,984 | ||||||||||||||||
Total | $ | 90,010 | $ | 52,792 | $ | 30,507 | $ | 8,946 | $ | 7,736 | $ | 99,981 | ||||||||||||
Segment Income (Loss) % of Revenue | ||||||||||||||||||||||||
Wealth Management | 13 | % | 11 | % | 13 | % | 14 | % | 15 | % | 13 | % | ||||||||||||
Tax Preparation | 48 | % | 54 | % | 64 | % | (88 | )% | (157 | )% | 48 | % | ||||||||||||
Total | 22 | % | 33 | % | 27 | % | 11 | % | 9 | % | 23 | % | ||||||||||||
Unallocated Corporate Operating Expense (3) | $ | 14,235 | $ | 4,376 | $ | 4,662 | $ | 4,433 | $ | 4,279 | $ | 17,750 | ||||||||||||
Adjusted EBITDA | $ | 75,775 | $ | 48,416 | $ | 25,845 | $ | 4,513 | $ | 3,457 | $ | 82,231 | ||||||||||||
Other Unallocated | ||||||||||||||||||||||||
Stock-based compensation (4) | $ | 13,591 | $ | 2,889 | $ | 3,289 | $ | 3,379 | $ | 4,034 | $ | 13,591 | ||||||||||||
Depreciation | 3,972 | 1,144 | 1,133 | 1,168 | 1,168 | 4,613 | ||||||||||||||||||
Amortization of acquired intangible assets (4) | 40,740 | 10,185 | 10,185 | 10,243 | 10,238 | 40,851 | ||||||||||||||||||
Interest income | (355 | ) | (122 | ) | (138 | ) | (170 | ) | (179 | ) | (609 | ) | ||||||||||||
Interest expense (5) | 37,034 | 9,224 | 9,220 | 9,298 | 9,317 | 37,059 | ||||||||||||||||||
Amortization of debt issuance costs (5) | 1,753 | 454 | 467 | 482 | 491 | 1,894 | ||||||||||||||||||
Accretion of debt discounts (5) | 4,525 | 1,178 | 1,207 | 1,235 | 1,260 | 4,880 | ||||||||||||||||||
Other (income) loss, net | (285 | ) | (487 | ) | (308 | ) | (214 | ) | (281 | ) | (1,290 | ) | ||||||||||||
Total | $ | 100,975 | $ | 24,465 | $ | 25,055 | $ | 25,421 | $ | 26,048 | $ | 100,989 | ||||||||||||
Income (Loss) from Continuing Operations before Taxes | $ | (25,200 | ) | $ | 23,951 | $ | 790 | $ | (20,908 | ) | $ | (22,591 | ) | $ | (18,758 | ) | ||||||||
Income Tax (Benefit) Expense (6) | ||||||||||||||||||||||||
Cash | $ | 2,200 | $ | 550 | $ | 550 | $ | 550 | $ | 550 | $ | 2,200 | ||||||||||||
Non-cash | (11,902 | ) | 8,671 | (245 | ) | (8,600 | ) | (9,248 | ) | (9,422 | ) | |||||||||||||
Total | $ | (9,702 | ) | $ | 9,221 | $ | 305 | $ | (8,050 | ) | $ | (8,698 | ) | $ | (7,222 | ) | ||||||||
GAAP Income (Loss) from Continuing Operations (7) | $ | (15,498 | ) | $ | 14,730 | $ | 485 | $ | (12,858 | ) | $ | (13,893 | ) | $ | (11,536 | ) | ||||||||
GAAP Income (Loss) from Continuing Operations per Share - diluted | $ | (0.37 | ) | $ | 0.35 | $ | 0.01 | $ | (0.31 | ) | $ | (0.34 | ) | $ | (0.28 | ) | ||||||||
Non-GAAP Income (Loss) from Continuing Operations | $ | 30,125 | $ | 37,315 | $ | 14,572 | $ | (6,961 | ) | $ | (7,976 | ) | $ | 36,950 | ||||||||||
Non-GAAP Income (Loss) from Continuing Operations per Share - diluted | $ | 0.70 | (8) | $ | 0.89 | $ | 0.35 | $ | (0.17 | ) | $ | (0.19 | ) | $ | 0.88 | (9) | ||||||||
Diluted Shares - GAAP | 41,396 | 41,899 | 41,936 | 40,950 | 40,979 | 40,959 | ||||||||||||||||||
Notes to Pro Forma Consolidated Financial Results on next page
2
Notes to Pro Forma Consolidated Financial Results
(1) | On October 14, 2015, Blucora announced the acquisition of HD Vest, which closed on December 31, 2015. As part of that announcement, we also stated our plans to divest the Search and Content and E-Commerce businesses in order to focus more strategically on the technology-enabled financial solutions market. The pro forma information represents the combination of HD Vest, TaxAct, and corporate expenses as if the acquisition closed on January 1, 2014. The Company believes that this presentation most accurately reflects the financial performance of the Company on a go-forward basis. |
(2) | As presented in the Pro Forma - Wealth Management Segment Financial Results on page 5. |
(3) | Unallocated corporate expenses exclude transaction costs related to the HD Vest acquisition and CEO separation-related costs. |
(4) | Includes stock-based compensation for Blucora share-based award grants to HD Vest employees and amortization of the definite-lived intangible assets identified in the HD Vest acquisition. |
(5) | Excludes interest expense and amortization of debt-related costs associated with the TaxAct 2013 credit facility and HD Vest's previous debt facility, both of which were paid off at the acquisition date, and includes similar expenses associated with the HD Vest - TaxAct 2015 credit facility that was used to finance the acquisition. |
(6) | Excludes historical tax expense and includes tax expense using an effective tax rate of 38.5% with anticipated cash taxes of $2.2 million per year, given expected net operating loss utilization. |
(7) | Excludes impacts of non-controlling interest associated with HD Vest management rollover equity ownership of 4.48%. Impacts of accounting for non-controlling interest are recorded after GAAP Income (Loss) from Continuing Operations. |
(8) | Calculation in FY 2014 used 42,946,000 diluted shares due to pro forma non-GAAP net income. |
(9) | Calculation in FY 2015 used 41,861,000 diluted shares due to pro forma non-GAAP net income. |
3
Reconciliation of Pro Forma Non-GAAP Financial Measures (1) (2)
2014 | 2015 | ||||||||||||||||||||||
(in thousands except per share amounts, rounding differences may exist) | FY 12/31 | 1Q | 2Q | 3Q | 4Q | FY 12/31 | |||||||||||||||||
Pro Forma Adjusted EBITDA | |||||||||||||||||||||||
Pro forma income (loss) from continuing operations (3) | $ | (15,498 | ) | $ | 14,730 | $ | 485 | $ | (12,858 | ) | $ | (13,893 | ) | $ | (11,536 | ) | |||||||
Pro forma stock-based compensation | 13,591 | 2,889 | 3,289 | 3,379 | 4,034 | 13,591 | |||||||||||||||||
Pro forma depreciation and amortization of acquired intangible assets | 44,712 | 11,329 | 11,318 | 11,411 | 11,406 | 45,464 | |||||||||||||||||
Pro forma other loss, net (4) | 42,672 | 10,247 | 10,448 | 10,631 | 10,608 | 41,934 | |||||||||||||||||
Pro forma income tax (benefit) expense | (9,702 | ) | 9,221 | 305 | (8,050 | ) | (8,698 | ) | (7,222 | ) | |||||||||||||
Pro forma adjusted EBITDA | $ | 75,775 | $ | 48,416 | $ | 25,845 | $ | 4,513 | $ | 3,457 | $ | 82,231 | |||||||||||
Pro Forma Non-GAAP Income (Loss) from Continuing Operations | |||||||||||||||||||||||
Pro forma income (loss) from continuing operations (3) | $ | (15,498 | ) | $ | 14,730 | $ | 485 | $ | (12,858 | ) | $ | (13,893 | ) | $ | (11,536 | ) | |||||||
Pro forma stock-based compensation | 13,591 | 2,889 | 3,289 | 3,379 | 4,034 | 13,591 | |||||||||||||||||
Pro forma amortization of acquired intangible assets | 40,740 | 10,185 | 10,185 | 10,243 | 10,238 | 40,851 | |||||||||||||||||
Pro forma accretion of debt discount on Convertible Senior Notes | 3,594 | 940 | 958 | 975 | 993 | 3,866 | |||||||||||||||||
Pro forma cash tax impact of adjustments to pro forma net income | (400 | ) | (100 | ) | (100 | ) | (100 | ) | (100 | ) | (400 | ) | |||||||||||
Pro forma non-cash income tax (benefit) expense | (11,902 | ) | 8,671 | (245 | ) | (8,600 | ) | (9,248 | ) | (9,422 | ) | ||||||||||||
Pro forma non-GAAP income (loss) from continuing operations | $ | 30,125 | $ | 37,315 | $ | 14,572 | $ | (6,961 | ) | $ | (7,976 | ) | $ | 36,950 | |||||||||
Pro forma non-GAAP income (loss) per share from continuing operations | $ | 0.70 | $ | 0.89 | $ | 0.35 | $ | (0.17 | ) | $ | (0.19 | ) | $ | 0.88 | |||||||||
Pro forma diluted shares | 42,946 | 41,899 | 41,936 | 40,950 | 40,979 | 41,861 | |||||||||||||||||
(1) | On October 14, 2015, Blucora announced the acquisition of HD Vest, which closed on December 31, 2015. As part of that announcement, we also stated our plans to divest the Search and Content and E-Commerce businesses in order to focus more strategically on the technology-enabled financial solutions market. The pro forma information represents the combination of HD Vest, TaxAct, and corporate expenses as if the acquisition closed on January 1, 2014. The Company believes that this presentation most accurately reflects the financial performance of the Company on a go-forward basis. |
(2) | For definitions of these non-GAAP financial measures and their relationship to our GAAP financial statements, see Note 1 to our Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures in exhibit 99.1 to the February 11, 2016 Current Report on Form 8-K. |
(3) | As presented in the Pro Forma - Blucora Consolidated Financial Results (unaudited) on page 2. |
(4) | 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, and gain on third party bankruptcy settlement. |
4
Pro Forma - Wealth Management Segment Financial Results
2014 | 2015 | ||||||||||||||||||||||
(in thousands except %s, rounding differences may exist) | FY 12/31 | 1Q | 2Q | 3Q | 4Q | FY 12/31 | |||||||||||||||||
Pro Forma Segment Revenue | $ | 304,854 | $ | 76,795 | $ | 80,834 | $ | 79,977 | $ | 82,133 | $ | 319,739 | |||||||||||
Pro Forma Segment Net Revenue (1) | $ | 96,735 | $ | 23,798 | $ | 25,587 | $ | 24,752 | $ | 25,612 | $ | 99,749 | |||||||||||
Pro Forma Segment Income (2) | $ | 40,314 | $ | 8,647 | $ | 10,617 | $ | 11,488 | $ | 12,245 | $ | 42,997 | |||||||||||
Pro Forma Segment Income % of Revenue | 13 | % | 11 | % | 13 | % | 14 | % | 15 | % | 13 | % | |||||||||||
Pro Forma Segment Income % of Net Revenue | 42 | % | 36 | % | 41 | % | 46 | % | 48 | % | 43 | % | |||||||||||
(in thousands except %s, rounding differences may exist) | 2014 | 2015 | |||||||||||||||||||||||
Sources of Revenue | Primary Drivers | FY 12/31 | 1Q | 2Q | 3Q | 4Q | FY 12/31 | ||||||||||||||||||
Advisor-driven | Commission | - Transactions - Asset levels | $ | 152,344 | $ | 37,476 | $ | 39,142 | $ | 38,835 | $ | 41,490 | $ | 156,943 | |||||||||||
Advisory | - Advisory asset levels | 120,185 | 31,734 | 32,799 | 33,327 | 31,573 | 129,434 | ||||||||||||||||||
Attachment revenue retained by us | Asset-Based | - Cash balances - Interest rates - Number of accounts - Client asset levels | 18,658 | 4,590 | 5,016 | 4,580 | 4,685 | 18,871 | |||||||||||||||||
Transaction and Fee | - Account activity - Number of clients - Number of advisors - Number of accounts | 13,666 | 2,996 | 3,876 | 3,235 | 4,385 | 14,492 | ||||||||||||||||||
Total Revenue | $ | 304,854 | $ | 76,795 | $ | 80,834 | $ | 79,977 | $ | 82,133 | $ | 319,739 | |||||||||||||
Total Recurring Revenue | $ | 236,100 | $ | 60,540 | $ | 63,409 | $ | 62,373 | $ | 61,671 | $ | 247,994 | |||||||||||||
(1) | Amount represents pro forma segment revenue less advisor commission payout. |
(2) | Excludes expenses associated with non-recurring projects. |
5
Pro Forma - Blucora Leverage Ratio
2015 | |||
(in thousands except ratio, rounding differences may exist) | FY 12/31 | ||
CASH: | |||
Cash and cash equivalents | $ | 55,473 | |
Available-for-sale investments | 11,301 | ||
$ | 66,774 | ||
DEBT: | |||
Convertible senior notes | $ | 201,250 | |
TaxAct - HD Vest 2015 credit facility | 400,000 | ||
Note payable, related party | 6,400 | ||
$ | 607,650 | ||
NET CASH / (DEBT) FROM CONTINUING OPERATIONS | $ | (540,876 | ) |
OTHER: | |||
Add: Escrow receivable (1) | $ | 20,000 | |
Add: Cash and cash equivalents with discontinued operations | 2,158 | ||
Less: Debt associated with discontinued operations | (25,000 | ) | |
$ | (2,842 | ) | |
TOTAL NET CASH / (DEBT) | $ | (543,718 | ) |
SEGMENT INCOME: | |||
Tax Preparation | $ | 56,984 | |
Wealth Management | 42,997 | ||
Discontinued Operations | 36,093 | ||
136,074 | |||
Unallocated corporate operating expenses | (17,750 | ) | |
ADJUSTED EBITDA | $ | 118,324 | |
LEVERAGE RATIO | (4.60 | ) | |
(1) | Amount represents consideration funded to escrow that is contingent upon HD Vest's 2015 earnings performance. The contingent consideration was not achieved; therefore, the amount will be returned to the Company from escrow. |
6
Blucora Operating Metrics - Wealth Management
2014 | 2015 | ||||||||||||||||||||||
(in thousands except %s and as indicated below, rounding differences may exist) | FY 12/31 | 1Q | 2Q | 3Q | 4Q | FY 12/31 | |||||||||||||||||
Total Assets Under Administration ("AUA") | $ | 37,132,757 | $ | 37,791,025 | $ | 37,839,908 | $ | 35,625,032 | $ | 36,573,766 | $ | 36,573,766 | |||||||||||
Advisory Assets Under Management ("AUM") | $ | 9,552,876 | $ | 9,860,064 | $ | 9,899,542 | $ | 9,396,557 | $ | 9,692,244 | $ | 9,692,244 | |||||||||||
% of Total Assets Under Administration | 25.7 | % | 26.1 | % | 26.2 | % | 26.4 | % | 26.5 | % | 26.5 | % | |||||||||||
Cash Sweep Assets | $ | 1,376,929 | $ | 1,322,701 | $ | 1,327,644 | $ | 1,480,025 | $ | 1,684,861 | $ | 1,684,861 | |||||||||||
Number of Advisors (in ones) | 4,515 | 4,564 | 4,579 | 4,625 | 4,600 | 4,600 | |||||||||||||||||
Recurring Revenue Rate | 77.4 | % | 78.8 | % | 78.4 | % | 78.0 | % | 75.1 | % | 77.6 | % | |||||||||||
7
Blucora Operating Metrics - Tax Preparation
(in thousands except %s, rounding differences may exist) | Tax seasons ended April 16, | Years ended December 31, | |||||||||||||||
Consumer e-files | 2015 | 2014 | % change | 2015 | 2014 | % change | |||||||||||
Online e-files | 5,058 | 5,067 | 0 | % | 5,235 | 5,262 | (1 | )% | |||||||||
Desktop e-files | 261 | 246 | 6 | % | 273 | 258 | 6 | % | |||||||||
Sub-total e-files | 5,319 | 5,313 | 0 | % | 5,508 | 5,520 | 0 | % | |||||||||
Free File Alliance e-files (1) | 172 | 210 | (18 | )% | 181 | 222 | (18 | )% | |||||||||
Total e-files | 5,491 | 5,523 | (1 | )% | 5,689 | 5,742 | (1 | )% | |||||||||
(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. |
8
As Reported - Blucora Consolidated Financial Results
2014 | 2015 | |||||||||||||||||||||||
(in thousands except %s and per share amounts, rounding differences may exist) | FY 12/31 | 1Q | 2Q | 3Q | 4Q | FY 12/31 | ||||||||||||||||||
Segment Revenue | ||||||||||||||||||||||||
Tax Preparation (1) | $ | 103,719 | $ | 81,068 | $ | 30,900 | $ | 2,875 | $ | 2,865 | $ | 117,708 | ||||||||||||
Segment Income (Loss) (2) | ||||||||||||||||||||||||
Tax Preparation (1) | $ | 49,696 | $ | 44,145 | $ | 19,890 | $ | (2,542 | ) | $ | (4,509 | ) | $ | 56,984 | ||||||||||
Segment Income (Loss) % of Revenue | ||||||||||||||||||||||||
Tax Preparation (1) | 48 | % | 54 | % | 64 | % | (88 | )% | (157 | )% | 48 | % | ||||||||||||
Unallocated Corporate Operating Expense (2) | $ | 14,235 | $ | 4,376 | $ | 4,662 | $ | 5,747 | $ | 15,722 | $ | 30,507 | ||||||||||||
Other Unallocated (2) | ||||||||||||||||||||||||
Stock-based compensation | $ | 8,694 | $ | 1,905 | $ | 1,995 | $ | 2,074 | $ | 2,720 | $ | 8,694 | ||||||||||||
Depreciation | 1,972 | 538 | 538 | 585 | 626 | 2,287 | ||||||||||||||||||
Amortization of acquired intangible assets | 20,192 | 5,048 | 5,048 | 5,106 | 5,101 | 20,303 | ||||||||||||||||||
Interest income | (355 | ) | (122 | ) | (138 | ) | (170 | ) | (179 | ) | (609 | ) | ||||||||||||
Interest expense | 9,476 | 2,388 | 2,242 | 2,203 | 2,211 | 9,044 | ||||||||||||||||||
Amortization of debt issuance costs | 1,059 | 276 | 280 | 286 | 291 | 1,133 | ||||||||||||||||||
Accretion of debt discounts | 3,594 | 940 | 958 | 975 | 993 | 3,866 | ||||||||||||||||||
Loss on debt extinguishment and modification expense | — | — | — | — | 398 | 398 | ||||||||||||||||||
Other (income) loss, net | (285 | ) | (487 | ) | (308 | ) | (214 | ) | (281 | ) | (1,290 | ) | ||||||||||||
Total | $ | 44,347 | $ | 10,486 | $ | 10,615 | $ | 10,845 | $ | 11,880 | $ | 43,826 | ||||||||||||
Income (Loss) from Continuing Operations before Taxes | $ | (8,886 | ) | $ | 29,283 | $ | 4,613 | $ | (19,134 | ) | $ | (32,111 | ) | $ | (17,349 | ) | ||||||||
Income Tax (Benefit) Expense | ||||||||||||||||||||||||
Cash | $ | 117 | $ | 57 | $ | 59 | $ | 58 | $ | 60 | $ | 234 | ||||||||||||
Non-cash (3) | (3,459 | ) | 9,811 | 2,143 | (6,984 | ) | (9,827 | ) | (4,857 | ) | ||||||||||||||
Total | $ | (3,342 | ) | $ | 9,868 | $ | 2,202 | $ | (6,926 | ) | $ | (9,767 | ) | $ | (4,623 | ) | ||||||||
GAAP Income (Loss) from Continuing Operations | $ | (5,544 | ) | $ | 19,415 | $ | 2,411 | $ | (12,208 | ) | $ | (22,344 | ) | $ | (12,726 | ) | ||||||||
GAAP Income (Loss) from Continuing Operations per Share - diluted | $ | (0.13 | ) | $ | 0.46 | $ | 0.06 | $ | (0.30 | ) | $ | (0.55 | ) | $ | (0.31 | ) | ||||||||
GAAP Discontinued Operations (4) | $ | (30,003 | ) | $ | 3,685 | $ | 1,840 | $ | 1,597 | $ | (34,470 | ) | $ | (27,348 | ) | |||||||||
GAAP Discontinued Operations per Share - diluted | $ | (0.73 | ) | $ | 0.09 | $ | 0.04 | $ | 0.04 | $ | (0.84 | ) | $ | (0.67 | ) | |||||||||
GAAP Net Income (Loss) | $ | (35,547 | ) | $ | 23,100 | $ | 4,251 | $ | (10,611 | ) | $ | (56,814 | ) | $ | (40,074 | ) | ||||||||
GAAP Net Income (Loss) per Share - diluted | $ | (0.86 | ) | $ | 0.55 | $ | 0.10 | $ | (0.26 | ) | $ | (1.39 | ) | $ | (0.98 | ) | ||||||||
Adjusted EBITDA | $ | 35,461 | $ | 39,769 | $ | 15,228 | $ | (6,975 | ) | $ | (8,788 | ) | $ | 39,234 | ||||||||||
Non-GAAP Income (Loss) from Continuing Operations | $ | 23,326 | $ | 37,085 | $ | 12,488 | $ | (9,919 | ) | $ | (11,455 | ) | $ | 28,199 | ||||||||||
Non-GAAP Income (Loss) from Continuing Operations per Share - diluted | $ | 0.54 | (5) | $ | 0.89 | $ | 0.30 | $ | (0.24 | ) | $ | (0.28 | ) | $ | 0.67 | (6) | ||||||||
Outstanding Shares | 40,882 | 40,851 | 40,944 | 40,951 | 40,954 | 40,954 | ||||||||||||||||||
Basic Shares - GAAP | 41,396 | 40,987 | 40,918 | 40,950 | 40,979 | 40,959 | ||||||||||||||||||
Diluted Shares - GAAP | 41,396 | 41,899 | 41,936 | 40,950 | 40,979 | 40,959 | ||||||||||||||||||
Cash & Short-term Investments | $ | 293,588 | $ | 306,899 | $ | 291,234 | $ | 283,689 | $ | 66,774 | $ | 66,774 | ||||||||||||
Outstanding Debt - Principal Amount | 253,190 | 229,250 | 231,250 | 231,250 | 607,650 | 607,650 | ||||||||||||||||||
Net Cash (Debt) | $ | 40,398 | $ | 77,649 | $ | 59,984 | $ | 52,439 | $ | (540,876 | ) | $ | (540,876 | ) | ||||||||||
Notes to As Reported Consolidated Financial Results on next page
9
Notes to As Reported Consolidated Financial Results
(1) | As a highly seasonal business, almost all of the Tax Preparation revenue is generated in the first four months of the calendar year. |
(2) | We do not allocate certain general and administrative costs (including personnel and overhead costs), stock-based compensation, depreciation, amortization of intangible assets, other income/loss, net, or income taxes to the reportable segment. The general and administrative costs are included in Unallocated Corporate Operating Expense. |
(3) | 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 consist primarily of US federal net operating losses. The majority of these deferred tax assets will expire, if unutilized, between 2020 and 2024. |
(4) | On October 14, 2015, we announced plans to divest of the Search and Content and E-Commerce businesses. Accordingly, our financial condition, results of operations, and cash flows reflect the Search and Content and E-Commerce businesses as discontinued operations for all periods presented. |
(5) | Calculation in FY 2014 used 42,946,000 diluted shares due to non-GAAP net income. |
(6) | Calculation in FY 2015 used 41,861,000 diluted shares due to non-GAAP net income. |
10
As Reported - Blucora Reconciliation of Non-GAAP Financial Measures (1)
2014 | 2015 | ||||||||||||||||||||||
(in thousands except per share amounts, rounding differences may exist) | FY 12/31 | 1Q | 2Q | 3Q | 4Q | FY 12/31 | |||||||||||||||||
Adjusted EBITDA | |||||||||||||||||||||||
Income (loss) from continuing operations (2) | $ | (5,544 | ) | $ | 19,415 | $ | 2,411 | $ | (12,208 | ) | $ | (22,344 | ) | $ | (12,726 | ) | |||||||
Stock-based compensation | 8,694 | 1,905 | 1,995 | 2,074 | 2,720 | 8,694 | |||||||||||||||||
Depreciation and amortization of acquired intangible assets | 22,164 | 5,586 | 5,586 | 5,691 | 5,727 | 22,590 | |||||||||||||||||
Acquisition-related transaction costs | — | — | — | 1,314 | 9,674 | 10,988 | |||||||||||||||||
CEO separation-related costs | — | — | — | — | 1,769 | 1,769 | |||||||||||||||||
Other loss, net (3) | 13,489 | 2,995 | 3,034 | 3,080 | 3,433 | 12,542 | |||||||||||||||||
Income tax (benefit) expense | (3,342 | ) | 9,868 | 2,202 | (6,926 | ) | (9,767 | ) | (4,623 | ) | |||||||||||||
Adjusted EBITDA (4) | $ | 35,461 | $ | 39,769 | $ | 15,228 | $ | (6,975 | ) | $ | (8,788 | ) | $ | 39,234 | |||||||||
Non-GAAP Income (Loss) from Continuing Operations | |||||||||||||||||||||||
Income (loss) from continuing operations (2) | $ | (5,544 | ) | $ | 19,415 | $ | 2,411 | $ | (12,208 | ) | $ | (22,344 | ) | $ | (12,726 | ) | |||||||
Stock-based compensation | 8,694 | 1,905 | 1,995 | 2,074 | 2,720 | 8,694 | |||||||||||||||||
Amortization of acquired intangible assets | 20,192 | 5,048 | 5,048 | 5,106 | 5,101 | 20,303 | |||||||||||||||||
Accretion of debt discount on Convertible Senior Notes | 3,594 | 940 | 958 | 975 | 993 | 3,866 | |||||||||||||||||
Loss on debt extinguishment and modification expense | — | — | — | — | 398 | 398 | |||||||||||||||||
Acquisition-related transaction costs | — | — | — | 1,314 | 9,674 | 10,988 | |||||||||||||||||
CEO separation-related costs | — | — | — | — | 1,769 | 1,769 | |||||||||||||||||
Cash tax impact of adjustments to GAAP net income | (151 | ) | (34 | ) | (67 | ) | (196 | ) | 61 | (236 | ) | ||||||||||||
Non-cash income tax (benefit) expense | (3,459 | ) | 9,811 | 2,143 | (6,984 | ) | (9,827 | ) | (4,857 | ) | |||||||||||||
Non-GAAP income (loss) from continuing operations (4) | $ | 23,326 | $ | 37,085 | $ | 12,488 | $ | (9,919 | ) | $ | (11,455 | ) | $ | 28,199 | |||||||||
Non-GAAP income (loss) from continuing operations per share | $ | 0.54 | $ | 0.89 | $ | 0.30 | $ | (0.24 | ) | $ | (0.28 | ) | $ | 0.67 | |||||||||
Diluted shares | 42,946 | 41,899 | 41,936 | 40,950 | 40,979 | 41,861 | |||||||||||||||||
(1) | For definitions of these non-GAAP financial measures and their relationship to our GAAP financial statements, see Note 1 to our Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures in exhibit 99.1 to the February 11, 2016 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, and gain on third party bankruptcy settlement. |
(4) | We define Adjusted EBITDA and Non-GAAP income (loss) from continuing operations differently effective with 4Q15 due to the discontinued operations treatment of our Search and Content and E-Commerce businesses, as well as transaction costs related to the HD Vest acquisition and separation-related costs in connection with the upcoming departure of our chief executive officer both of which were announced in 4Q15. |
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As Reported - Blucora Reconciliation of Operating Free Cash Flow (1)
2014 | 2015 | ||||||||||||||||||||||
(in thousands, rounding differences may exist) | FY 12/31 | 1Q | 2Q | 3Q | 4Q | FY 12/31 | |||||||||||||||||
Net cash provided (used) by operating activities from continuing operations | $ | 20,128 | $ | 28,187 | $ | 1,613 | $ | (8,854 | ) | $ | (4,605 | ) | $ | 16,341 | |||||||||
Excess tax benefits from stock-based award activity (2) | 6,398 | 22,081 | 5,484 | 1,067 | (20,665 | ) | 7,967 | ||||||||||||||||
Purchases of property and equipment | (2,037 | ) | (259 | ) | (366 | ) | (241 | ) | (646 | ) | (1,512 | ) | |||||||||||
Operating free cash flow | $ | 24,489 | $ | 50,009 | $ | 6,731 | $ | (8,028 | ) | $ | (25,916 | ) | $ | 22,796 | |||||||||
(1) | We define operating free cash flow as net cash provided by operating activities from continuing operations 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. |
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