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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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91-1718107
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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10900 NE 8th Street, Suite 800
Bellevue, Washington
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98004
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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o
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Non-accelerated filer
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o
(Do not check if a smaller reporting company)
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Smaller reporting company
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o
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Outstanding at
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Class
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July 23, 2015
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Common Stock, Par Value $0.0001
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40,963,103
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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June 30,
2015 |
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December 31,
2014 |
||||
ASSETS
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|
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|
||||
Current assets:
|
|
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|
||||
Cash and cash equivalents
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$
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59,498
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$
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46,444
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Available-for-sale investments
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237,389
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|
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254,854
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||
Accounts receivable, net of allowance of $111 and $67
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26,688
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30,988
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Other receivables
|
1,046
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|
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3,295
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Inventories
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34,434
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|
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29,246
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Prepaid expenses and other current assets, net
|
12,529
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13,477
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Total current assets
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371,584
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|
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378,304
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Property and equipment, net
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15,595
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15,942
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||
Goodwill, net
|
304,658
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304,658
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Other intangible assets, net
|
153,654
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|
|
168,919
|
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Other long-term assets
|
4,238
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|
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4,891
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|
||
Total assets
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$
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849,729
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$
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872,714
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LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
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||||
Current liabilities:
|
|
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|
||||
Accounts payable
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$
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31,274
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|
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$
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37,755
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Accrued expenses and other current liabilities
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24,391
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|
|
21,505
|
|
||
Deferred revenue
|
6,074
|
|
|
7,884
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|
||
Short-term portion of long-term debt, net
|
—
|
|
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7,914
|
|
||
Total current liabilities
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61,739
|
|
|
75,058
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|
||
Long-term liabilities:
|
|
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Long-term debt, net
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30,000
|
|
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85,835
|
|
||
Convertible senior notes, net
|
187,075
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|
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185,177
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|
||
Deferred tax liability, net
|
23,178
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|
|
42,963
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|
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Deferred revenue
|
2,910
|
|
|
1,915
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Other long-term liabilities
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3,195
|
|
|
2,741
|
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Total long-term liabilities
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246,358
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|
|
318,631
|
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Total liabilities
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308,097
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393,689
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Commitments and contingencies (Note 7)
|
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Stockholders’ equity:
|
|
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|
||||
Common stock, par $0.0001—authorized shares, 900,000; issued and outstanding shares,
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|
|
|
||||
40,944 and 40,882
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4
|
|
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4
|
|
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Additional paid-in capital
|
1,501,793
|
|
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1,467,658
|
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Accumulated deficit
|
(960,173
|
)
|
|
(987,524
|
)
|
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Accumulated other comprehensive income (loss)
|
8
|
|
|
(1,113
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)
|
||
Total stockholders’ equity
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541,632
|
|
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479,025
|
|
||
Total liabilities and stockholders’ equity
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$
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849,729
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$
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872,714
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Three months ended June 30,
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Six months ended June 30,
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||||||||||||
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2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Services revenue
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$
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83,030
|
|
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$
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106,270
|
|
|
$
|
222,844
|
|
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$
|
285,314
|
|
Product revenue, net
|
35,946
|
|
|
35,299
|
|
|
70,958
|
|
|
72,438
|
|
||||
Total revenues
|
118,976
|
|
|
141,569
|
|
|
293,802
|
|
|
357,752
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of revenues:
|
|
|
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Services cost of revenue
|
30,771
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|
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56,233
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|
|
65,712
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|
|
127,526
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|
||||
Product cost of revenue
|
25,255
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|
|
23,137
|
|
|
49,355
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|
|
48,166
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|
||||
Total cost of revenues
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56,026
|
|
|
79,370
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|
|
115,067
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|
|
175,692
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|
||||
Engineering and technology
|
5,168
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|
|
4,817
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|
|
10,385
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|
|
8,952
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|
||||
Sales and marketing
|
27,287
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|
|
22,287
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|
|
81,483
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|
|
78,123
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|
||||
General and administrative
|
11,014
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|
|
10,425
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|
21,423
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|
|
19,057
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|
||||
Depreciation
|
1,187
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|
|
1,135
|
|
|
2,325
|
|
|
2,193
|
|
||||
Amortization of intangible assets
|
6,118
|
|
|
5,761
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|
|
12,236
|
|
|
11,345
|
|
||||
Total operating expenses
|
106,800
|
|
|
123,795
|
|
|
242,919
|
|
|
295,362
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|
||||
Operating income
|
12,176
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|
17,774
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|
|
50,883
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|
|
62,390
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|
||||
Other loss, net
|
(4,577
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)
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(3,724
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)
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(8,303
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)
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(7,793
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)
|
||||
Income before income taxes
|
7,599
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|
|
14,050
|
|
|
42,580
|
|
|
54,597
|
|
||||
Income tax expense
|
(3,348
|
)
|
|
(5,313
|
)
|
|
(15,229
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)
|
|
(19,873
|
)
|
||||
Net income
|
$
|
4,251
|
|
|
$
|
8,737
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|
$
|
27,351
|
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$
|
34,724
|
|
Net income per share:
|
|
|
|
|
|
|
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||||||||
Basic
|
$
|
0.10
|
|
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$
|
0.21
|
|
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$
|
0.67
|
|
|
$
|
0.83
|
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Diluted
|
$
|
0.10
|
|
|
$
|
0.20
|
|
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$
|
0.65
|
|
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$
|
0.79
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
40,918
|
|
|
41,570
|
|
|
40,953
|
|
|
41,866
|
|
||||
Diluted
|
41,936
|
|
|
43,084
|
|
|
41,918
|
|
|
43,803
|
|
||||
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
4,251
|
|
|
$
|
8,737
|
|
|
$
|
27,351
|
|
|
$
|
34,724
|
|
Unrealized gain (loss) on available-for-sale investments, net of tax
|
(187
|
)
|
|
2,076
|
|
|
(260
|
)
|
|
2,090
|
|
||||
Reclassification adjustment for realized loss on available-for-sale investments, net of tax, included in net income as Other loss, net
|
376
|
|
|
—
|
|
|
417
|
|
|
—
|
|
||||
Reclassification adjustment for other-than-temporary impairment loss on available-for-sale investments, included in net income as Other loss, net
|
964
|
|
|
—
|
|
|
964
|
|
|
—
|
|
||||
Other comprehensive income
|
1,153
|
|
|
2,076
|
|
|
1,121
|
|
|
2,090
|
|
||||
Comprehensive income
|
$
|
5,404
|
|
|
$
|
10,813
|
|
|
$
|
28,472
|
|
|
$
|
36,814
|
|
|
Six months ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Operating Activities:
|
|
|
|
||||
Net income
|
$
|
27,351
|
|
|
$
|
34,724
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
||||
Stock-based compensation
|
6,047
|
|
|
6,366
|
|
||
Depreciation and amortization of intangible assets
|
18,932
|
|
|
17,920
|
|
||
Excess tax benefits from stock-based award activity
|
(32,535
|
)
|
|
(34,369
|
)
|
||
Deferred income taxes
|
(21,558
|
)
|
|
(18,172
|
)
|
||
Amortization of premium on investments, net
|
902
|
|
|
2,221
|
|
||
Amortization of debt issuance costs
|
643
|
|
|
565
|
|
||
Accretion of debt discounts
|
2,089
|
|
|
1,822
|
|
||
Realized loss on available-for-sale investments, net
|
417
|
|
|
—
|
|
||
Other-than-temporary impairment loss on equity securities
|
964
|
|
|
—
|
|
||
Other
|
112
|
|
|
57
|
|
||
Cash provided (used) by changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
4,245
|
|
|
12,347
|
|
||
Other receivables
|
2,249
|
|
|
4,362
|
|
||
Inventories
|
(5,188
|
)
|
|
(1,738
|
)
|
||
Prepaid expenses and other current assets
|
2,048
|
|
|
874
|
|
||
Other long-term assets
|
(2
|
)
|
|
48
|
|
||
Accounts payable
|
(6,481
|
)
|
|
(18,011
|
)
|
||
Deferred revenue
|
(815
|
)
|
|
(555
|
)
|
||
Accrued expenses and other current and long-term liabilities
|
35,270
|
|
|
26,789
|
|
||
Net cash provided by operating activities
|
34,690
|
|
|
35,250
|
|
||
Investing Activities:
|
|
|
|
||||
Business acquisition, net of cash acquired
|
—
|
|
|
(44,927
|
)
|
||
Purchases of property and equipment
|
(2,105
|
)
|
|
(2,859
|
)
|
||
Purchases of intangible assets
|
(696
|
)
|
|
—
|
|
||
Proceeds from sales of investments
|
15,008
|
|
|
21,546
|
|
||
Proceeds from maturities of investments
|
113,406
|
|
|
121,496
|
|
||
Purchases of investments
|
(112,090
|
)
|
|
(144,049
|
)
|
||
Net cash provided (used) by investing activities
|
13,523
|
|
|
(48,793
|
)
|
||
Financing Activities:
|
|
|
|
||||
Proceeds from credit facilities
|
20,000
|
|
|
4,000
|
|
||
Repayment of credit facilities
|
(83,940
|
)
|
|
(60,000
|
)
|
||
Stock repurchases
|
(5,521
|
)
|
|
(25,785
|
)
|
||
Excess tax benefits from stock-based award activity
|
32,535
|
|
|
34,369
|
|
||
Proceeds from stock option exercises
|
2,093
|
|
|
1,746
|
|
||
Proceeds from issuance of stock through employee stock purchase plan
|
608
|
|
|
665
|
|
||
Tax payments from shares withheld upon vesting of restricted stock units
|
(934
|
)
|
|
(1,913
|
)
|
||
Net cash used by financing activities
|
(35,159
|
)
|
|
(46,918
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
13,054
|
|
|
(60,461
|
)
|
||
Cash and cash equivalents, beginning of period
|
46,444
|
|
|
130,225
|
|
||
Cash and cash equivalents, end of period
|
$
|
59,498
|
|
|
$
|
69,764
|
|
Supplemental disclosure of non-cash investing activities:
|
|
|
|
||||
Purchases of property and equipment through leasehold incentives
|
$
|
515
|
|
|
$
|
120
|
|
Cash paid for:
|
|
|
|
||||
Income taxes
|
$
|
1,080
|
|
|
$
|
2,012
|
|
Interest
|
$
|
5,241
|
|
|
$
|
5,766
|
|
|
Search and Content
|
|
Tax Preparation
|
|
E-Commerce
|
|
Total
|
||||||||
Goodwill, net
|
$
|
59,912
|
|
|
$
|
188,541
|
|
|
$
|
56,205
|
|
|
$
|
304,658
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
|
Gross carrying amount
|
|
Accumulated
amortization
|
|
Net
|
|
Gross carrying amount
|
|
Accumulated
amortization
|
|
Net
|
||||||||||||
Definite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
$
|
132,500
|
|
|
$
|
(61,242
|
)
|
|
$
|
71,258
|
|
|
$
|
132,500
|
|
|
$
|
(50,075
|
)
|
|
$
|
82,425
|
|
Technology
|
44,805
|
|
|
(39,533
|
)
|
|
5,272
|
|
|
44,805
|
|
|
(35,649
|
)
|
|
9,156
|
|
||||||
Content
|
18,200
|
|
|
(1,971
|
)
|
|
16,229
|
|
|
18,200
|
|
|
(1,061
|
)
|
|
17,139
|
|
||||||
Other
|
6,667
|
|
|
(6,667
|
)
|
|
—
|
|
|
6,667
|
|
|
(6,667
|
)
|
|
—
|
|
||||||
Total definite-lived intangible assets
|
202,172
|
|
|
(109,413
|
)
|
|
92,759
|
|
|
202,172
|
|
|
(93,452
|
)
|
|
108,720
|
|
||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade names
|
60,199
|
|
|
—
|
|
|
60,199
|
|
|
60,199
|
|
|
—
|
|
|
60,199
|
|
||||||
Internet domain names
|
696
|
|
|
—
|
|
|
696
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total indefinite-lived intangible assets
|
60,895
|
|
|
—
|
|
|
60,895
|
|
|
60,199
|
|
|
—
|
|
|
60,199
|
|
||||||
Total
|
$
|
263,067
|
|
|
$
|
(109,413
|
)
|
|
$
|
153,654
|
|
|
$
|
262,371
|
|
|
$
|
(93,452
|
)
|
|
$
|
168,919
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Statement of comprehensive income line item:
|
|
|
|
|
|
|
|
||||||||
Services cost of revenue
|
$
|
1,863
|
|
|
$
|
1,881
|
|
|
$
|
3,725
|
|
|
$
|
3,766
|
|
Amortization of intangible assets
|
6,118
|
|
|
5,761
|
|
|
12,236
|
|
|
11,345
|
|
||||
Total
|
$
|
7,981
|
|
|
$
|
7,642
|
|
|
$
|
15,961
|
|
|
$
|
15,111
|
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
|
Total
|
||||||||||||||
Services cost of revenue
|
$
|
3,725
|
|
|
$
|
621
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,346
|
|
Amortization of intangible assets
|
9,644
|
|
|
17,206
|
|
|
17,155
|
|
|
16,970
|
|
|
16,838
|
|
|
10,600
|
|
|
88,413
|
|
|||||||
Total
|
$
|
13,369
|
|
|
$
|
17,827
|
|
|
$
|
17,155
|
|
|
$
|
16,970
|
|
|
$
|
16,838
|
|
|
$
|
10,600
|
|
|
$
|
92,759
|
|
|
|
|
Fair value measurements at the reporting date using
|
||||||||||||
|
June 30, 2015
|
|
Quoted prices in
active markets
using identical assets
(Level 1)
|
|
Significant other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market and other funds
|
$
|
4,762
|
|
|
$
|
—
|
|
|
$
|
4,762
|
|
|
$
|
—
|
|
Commercial paper
|
5,899
|
|
|
—
|
|
|
5,899
|
|
|
—
|
|
||||
Time deposits
|
748
|
|
|
—
|
|
|
748
|
|
|
—
|
|
||||
Taxable municipal bonds
|
745
|
|
|
—
|
|
|
745
|
|
|
—
|
|
||||
Total cash equivalents
|
12,154
|
|
|
—
|
|
|
12,154
|
|
|
—
|
|
||||
Available-for-sale investments:
|
|
|
|
|
|
|
|
||||||||
Debt securities:
|
|
|
|
|
|
|
|
||||||||
U.S. government securities
|
102,573
|
|
|
—
|
|
|
102,573
|
|
|
—
|
|
||||
International government securities
|
5,205
|
|
|
—
|
|
|
5,205
|
|
|
—
|
|
||||
Commercial paper
|
22,984
|
|
|
—
|
|
|
22,984
|
|
|
—
|
|
||||
Time deposits
|
23,211
|
|
|
—
|
|
|
23,211
|
|
|
—
|
|
||||
Taxable municipal bonds
|
81,493
|
|
|
—
|
|
|
81,493
|
|
|
—
|
|
||||
Total debt securities
|
235,466
|
|
|
—
|
|
|
235,466
|
|
|
—
|
|
||||
Equity securities
|
1,923
|
|
|
1,923
|
|
|
—
|
|
|
—
|
|
||||
Total available-for-sale investments
|
237,389
|
|
|
1,923
|
|
|
235,466
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
249,543
|
|
|
$
|
1,923
|
|
|
$
|
247,620
|
|
|
$
|
—
|
|
|
|
|
Fair value measurements at the reporting date using
|
||||||||||||
|
December 31, 2014
|
|
Quoted prices in
active markets
using identical assets
(Level 1)
|
|
Significant other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market and other funds
|
$
|
8,490
|
|
|
$
|
—
|
|
|
$
|
8,490
|
|
|
$
|
—
|
|
Time deposits
|
1,242
|
|
|
—
|
|
|
1,242
|
|
|
—
|
|
||||
Taxable municipal bonds
|
4,754
|
|
|
—
|
|
|
4,754
|
|
|
—
|
|
||||
Total cash equivalents
|
14,486
|
|
|
—
|
|
|
14,486
|
|
|
—
|
|
||||
Available-for-sale investments:
|
|
|
|
|
|
|
|
||||||||
Debt securities:
|
|
|
|
|
|
|
|
||||||||
U.S. government securities
|
100,818
|
|
|
—
|
|
|
100,818
|
|
|
—
|
|
||||
International government securities
|
6,560
|
|
|
—
|
|
|
6,560
|
|
|
—
|
|
||||
Commercial paper
|
24,589
|
|
|
—
|
|
|
24,589
|
|
|
—
|
|
||||
Time deposits
|
30,759
|
|
|
—
|
|
|
30,759
|
|
|
—
|
|
||||
Corporate bonds
|
1,528
|
|
|
—
|
|
|
1,528
|
|
|
—
|
|
||||
Taxable municipal bonds
|
87,366
|
|
|
—
|
|
|
87,366
|
|
|
—
|
|
||||
Total debt securities
|
251,620
|
|
|
—
|
|
|
251,620
|
|
|
—
|
|
||||
Equity securities
|
3,234
|
|
|
3,234
|
|
|
—
|
|
|
—
|
|
||||
Total available-for-sale investments
|
254,854
|
|
|
3,234
|
|
|
251,620
|
|
|
—
|
|
||||
Total assets at fair value
|
$
|
269,340
|
|
|
$
|
3,234
|
|
|
$
|
266,106
|
|
|
$
|
—
|
|
|
Amortized
cost
|
|
Gross unrealized
gains
|
|
Gross unrealized
losses
|
|
Fair
value
|
||||||||
Balance at June 30, 2015
|
|
|
|
|
|
|
|
||||||||
Debt securities
|
$
|
235,455
|
|
|
$
|
34
|
|
|
$
|
(23
|
)
|
|
$
|
235,466
|
|
Equity securities
|
1,923
|
|
|
—
|
|
|
—
|
|
|
1,923
|
|
||||
Total
|
$
|
237,378
|
|
|
$
|
34
|
|
|
$
|
(23
|
)
|
|
$
|
237,389
|
|
Balance at December 31, 2014
|
|
|
|
|
|
|
|
||||||||
Debt securities
|
$
|
251,673
|
|
|
$
|
16
|
|
|
$
|
(69
|
)
|
|
$
|
251,620
|
|
Equity securities
|
4,312
|
|
|
—
|
|
|
(1,078
|
)
|
|
3,234
|
|
||||
Total
|
$
|
255,985
|
|
|
$
|
16
|
|
|
$
|
(1,147
|
)
|
|
$
|
254,854
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
|
Principal
amount
|
|
Unamortized
discount
|
|
Net carrying
value
|
|
Principal
amount
|
|
Unamortized
discount
|
|
Net carrying
value
|
||||||||||||
Monoprice 2013 credit facility
|
$
|
30,000
|
|
|
$
|
—
|
|
|
$
|
30,000
|
|
|
$
|
42,000
|
|
|
$
|
(191
|
)
|
|
$
|
41,809
|
|
TaxACT 2013 credit facility
|
—
|
|
|
—
|
|
|
—
|
|
|
51,940
|
|
|
—
|
|
|
51,940
|
|
||||||
Convertible Senior Notes
|
201,250
|
|
|
(14,175
|
)
|
|
187,075
|
|
|
201,250
|
|
|
(16,073
|
)
|
|
185,177
|
|
||||||
Total debt
|
$
|
231,250
|
|
|
$
|
(14,175
|
)
|
|
$
|
217,075
|
|
|
$
|
295,190
|
|
|
$
|
(16,264
|
)
|
|
$
|
278,926
|
|
•
|
During any fiscal quarter commencing July 1, 2013, if the last reported sale price of the Company’s common stock for at least
20
trading days during a period of
30
consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to
130%
of the conversion price on each applicable trading day. As of
June 30, 2015
, the Notes were not convertible.
|
•
|
During the
five
business day period after any
five
consecutive trading day period (the “
measurement period
”) in which the trading price per
$1,000
principal amount of the Notes for each trading day of the measurement period was less than
98%
of the product of the last reported sales price of the Company’s common stock and the conversion rate on each trading day.
|
•
|
If the Company calls any or all of the Notes for redemption.
|
•
|
Upon the occurrence of specified corporate events, including a merger or a sale of all or substantially all of the Company’s assets.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Contractual interest expense (Cash)
|
$
|
2,139
|
|
|
$
|
2,139
|
|
|
$
|
4,277
|
|
|
$
|
4,277
|
|
Amortization of debt issuance costs (Non-cash)
|
245
|
|
|
228
|
|
|
486
|
|
|
452
|
|
||||
Accretion of debt discount (Non-cash)
|
958
|
|
|
890
|
|
|
1,898
|
|
|
1,764
|
|
||||
Total interest expense
|
$
|
3,342
|
|
|
$
|
3,257
|
|
|
$
|
6,661
|
|
|
$
|
6,493
|
|
Effective interest rate of the liability component
|
7.32
|
%
|
|
7.32
|
%
|
|
7.32
|
%
|
|
7.32
|
%
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Cost of revenues
|
$
|
58
|
|
|
$
|
113
|
|
|
$
|
107
|
|
|
$
|
272
|
|
Engineering and technology
|
514
|
|
|
315
|
|
|
806
|
|
|
744
|
|
||||
Sales and marketing
|
518
|
|
|
722
|
|
|
948
|
|
|
1,641
|
|
||||
General and administrative
|
2,258
|
|
|
1,808
|
|
|
4,186
|
|
|
3,709
|
|
||||
Total
|
$
|
3,348
|
|
|
$
|
2,958
|
|
|
$
|
6,047
|
|
|
$
|
6,366
|
|
Excluded and capitalized as part of internal-use software
|
$
|
45
|
|
|
$
|
23
|
|
|
$
|
61
|
|
|
$
|
54
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Stock options exercised
|
49
|
|
|
132
|
|
|
220
|
|
|
140
|
|
RSUs vested
|
111
|
|
|
129
|
|
|
169
|
|
|
205
|
|
Shares purchased pursuant to ESPP
|
—
|
|
|
—
|
|
|
52
|
|
|
36
|
|
Total
|
160
|
|
|
261
|
|
|
441
|
|
|
381
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Search and Content
|
$
|
52,130
|
|
|
$
|
79,818
|
|
|
$
|
110,876
|
|
|
$
|
186,583
|
|
Tax Preparation
|
30,900
|
|
|
26,452
|
|
|
111,968
|
|
|
98,731
|
|
||||
E-Commerce
|
35,946
|
|
|
35,299
|
|
|
70,958
|
|
|
72,438
|
|
||||
Total revenues
|
118,976
|
|
|
141,569
|
|
|
293,802
|
|
|
357,752
|
|
||||
Operating income:
|
|
|
|
|
|
|
|
||||||||
Search and Content
|
6,814
|
|
|
14,032
|
|
|
15,212
|
|
|
33,262
|
|
||||
Tax Preparation
|
19,890
|
|
|
17,211
|
|
|
64,035
|
|
|
54,613
|
|
||||
E-Commerce
|
2,624
|
|
|
2,378
|
|
|
5,186
|
|
|
5,856
|
|
||||
Corporate-level activity
|
(17,152
|
)
|
|
(15,847
|
)
|
|
(33,550
|
)
|
|
(31,341
|
)
|
||||
Total operating income
|
12,176
|
|
|
17,774
|
|
|
50,883
|
|
|
62,390
|
|
||||
Other loss, net
|
(4,577
|
)
|
|
(3,724
|
)
|
|
(8,303
|
)
|
|
(7,793
|
)
|
||||
Income tax expense
|
(3,348
|
)
|
|
(5,313
|
)
|
|
(15,229
|
)
|
|
(19,873
|
)
|
||||
Net income
|
$
|
4,251
|
|
|
$
|
8,737
|
|
|
$
|
27,351
|
|
|
$
|
34,724
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
Weighted average common shares outstanding, basic
|
40,918
|
|
|
41,570
|
|
|
40,953
|
|
|
41,866
|
|
Dilutive potential common shares
|
1,018
|
|
|
1,514
|
|
|
965
|
|
|
1,937
|
|
Weighted average common shares outstanding, diluted
|
41,936
|
|
|
43,084
|
|
|
41,918
|
|
|
43,803
|
|
Shares excluded
|
2,914
|
|
|
906
|
|
|
2,825
|
|
|
823
|
|
(In thousands, except percentages)
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
Percentage
Change |
|
2015
|
|
2014
|
|
Percentage
Change |
||||||||||
Services revenue
|
$
|
83,030
|
|
|
$
|
106,270
|
|
|
(22
|
)%
|
|
$
|
222,844
|
|
|
$
|
285,314
|
|
|
(22
|
)%
|
Product revenue, net
|
35,946
|
|
|
35,299
|
|
|
2
|
%
|
|
70,958
|
|
|
72,438
|
|
|
(2
|
)%
|
||||
Total revenues
|
$
|
118,976
|
|
|
$
|
141,569
|
|
|
(16
|
)%
|
|
$
|
293,802
|
|
|
$
|
357,752
|
|
|
(18
|
)%
|
Operating income
|
$
|
12,176
|
|
|
$
|
17,774
|
|
|
(31
|
)%
|
|
$
|
50,883
|
|
|
$
|
62,390
|
|
|
(18
|
)%
|
•
|
$20.5 million
decrease
in the Search and Content segment’s operating expenses, primarily as a result of lower revenue share owed to our distribution partners resulting from the decrease in Search and Content distribution revenue and decreased content costs, offset by higher spending on online marketing and higher personnel expenses primarily due to the timing of the HSW acquisition.
|
•
|
$1.8 million
increase
in the Tax Preparation segment’s operating expenses, primarily due to increased spending on marketing campaigns for the current tax season and higher personnel expenses due to increased headcount.
|
•
|
$0.4 million
increase
in the E-Commerce segment's operating expenses, primarily due to higher E-Commerce product cost of revenue resulting from the increase in product revenue and a shift in the mix of sales of certain products, offset by lower personnel expenses, resulting from a charge in the second quarter of 2014 related to the resignation of the former President of Monoprice.
|
•
|
$1.3 million
increase
in corporate-level expense activity, primarily as a result of higher personnel expenses due to increased headcount to support operations, higher stock-based compensation mainly related to a net increase in stock award grants and changes in award forfeitures impacted by the timing of leadership transitions and offset by stock-based compensation on the stock options that vested upon the completion of the HSW acquisition in the second quarter of 2014, as well as amortization expense associated with the acquisition of HSW.
|
•
|
$57.7 million
decrease
in the Search and Content segment’s operating expenses, primarily as a result of lower revenue share owed to our distribution partners resulting from the decrease in Search and Content distribution revenue and decreased content costs, offset by higher personnel expenses primarily due to the timing of the HSW acquisition and higher spending on online marketing.
|
•
|
$3.8 million
increase
in the Tax Preparation segment’s operating expenses, primarily due to increased spending on marketing campaigns for the current tax season and higher personnel expenses due to increased headcount.
|
•
|
$0.8 million
decrease
in the E-Commerce segment's operating expenses, primarily due to lower personnel expenses, resulting from a charge in the second quarter of 2014 related to the resignation of the former President of Monoprice, and lower advertising and marketing expenses, offset by higher E-Commerce product cost of revenue resulting from a shift in the mix of sales of certain products.
|
•
|
$2.2 million
increase
in corporate-level expense activity, primarily as a result of higher personnel expenses due to increased headcount to support operations and amortization expense associated with the acquisition of HSW, offset by lower stock-based compensation due to the stock options that vested upon the completion of the HSW acquisition in the second quarter of 2014 and changes in award forfeitures impacted by the timing of leadership transitions. The lower stock-based compensation was offset by a net increase in stock award grants in the current year.
|
(In thousands, except percentages)
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
Percentage
Change
|
|
2015
|
|
2014
|
|
Percentage
Change |
||||||||||
Revenue
|
$
|
52,130
|
|
|
$
|
79,818
|
|
|
(35
|
)%
|
|
$
|
110,876
|
|
|
$
|
186,583
|
|
|
(41
|
)%
|
Operating income
|
$
|
6,814
|
|
|
$
|
14,032
|
|
|
(51
|
)%
|
|
$
|
15,212
|
|
|
$
|
33,262
|
|
|
(54
|
)%
|
Segment margin
|
13
|
%
|
|
18
|
%
|
|
|
|
14
|
%
|
|
18
|
%
|
|
|
|
(In thousands, except percentages)
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||||||
|
2015
|
|
Percentage of
Revenue
|
|
2014
|
|
Percentage of
Revenue
|
|
2015
|
|
Percentage of
Revenue |
|
2014
|
|
Percentage of
Revenue |
||||||||||||
Revenue from existing distribution partners (launched prior to the then-current year)
|
$
|
33,945
|
|
|
65
|
%
|
|
$
|
65,358
|
|
|
82
|
%
|
|
$
|
72,816
|
|
|
66
|
%
|
|
$
|
148,993
|
|
|
80
|
%
|
Revenue from new distribution partners (launched during the then-current year)
|
493
|
|
|
1
|
%
|
|
1,162
|
|
|
1
|
%
|
|
521
|
|
|
0
|
%
|
|
1,291
|
|
|
1
|
%
|
||||
Revenue from distribution partners
|
34,438
|
|
|
66
|
%
|
|
66,520
|
|
|
83
|
%
|
|
73,337
|
|
|
66
|
%
|
|
150,284
|
|
|
81
|
%
|
||||
Revenue from owned and operated web properties
|
17,692
|
|
|
34
|
%
|
|
13,298
|
|
|
17
|
%
|
|
37,539
|
|
|
34
|
%
|
|
36,299
|
|
|
19
|
%
|
||||
Total Search and Content revenue
|
$
|
52,130
|
|
|
|
|
$
|
79,818
|
|
|
|
|
$
|
110,876
|
|
|
|
|
$
|
186,583
|
|
|
|
(In thousands, except percentages)
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
Percentage
Change
|
|
2015
|
|
2014
|
|
Percentage
Change |
||||||||||
Revenue
|
$
|
30,900
|
|
|
$
|
26,452
|
|
|
17
|
%
|
|
$
|
111,968
|
|
|
$
|
98,731
|
|
|
13
|
%
|
Operating income
|
$
|
19,890
|
|
|
$
|
17,211
|
|
|
16
|
%
|
|
$
|
64,035
|
|
|
$
|
54,613
|
|
|
17
|
%
|
Segment margin
|
64
|
%
|
|
65
|
%
|
|
|
|
57
|
%
|
|
55
|
%
|
|
|
(In thousands, except percentages)
|
Six months ended June 30,
|
|||||||
|
2015
|
|
2014
|
|
Percentage
Change |
|||
Online e-files
|
5,158
|
|
|
5,189
|
|
|
(1
|
)%
|
Desktop e-files
|
266
|
|
|
251
|
|
|
6
|
%
|
Sub-total e-files
|
5,424
|
|
|
5,440
|
|
|
0
|
%
|
Free File Alliance e-files
(1)
|
177
|
|
|
218
|
|
|
(19
|
)%
|
Total e-files
|
5,601
|
|
|
5,658
|
|
|
(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.
|
(In thousands, except percentages)
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
Percentage
Change
|
|
2015
|
|
2014
|
|
Percentage
Change
|
||||||||||
Revenue
|
$
|
35,946
|
|
|
$
|
35,299
|
|
|
2
|
%
|
|
$
|
70,958
|
|
|
$
|
72,438
|
|
|
(2
|
)%
|
Operating income
|
$
|
2,624
|
|
|
$
|
2,378
|
|
|
10
|
%
|
|
$
|
5,186
|
|
|
$
|
5,856
|
|
|
(11
|
)%
|
Segment margin
|
7
|
%
|
|
7
|
%
|
|
|
|
7
|
%
|
|
8
|
%
|
|
|
|
Three months ended June 30, 2015
|
|
Six months ended June 30, 2015
|
||
Order numbers
|
(2
|
)%
|
|
(7
|
)%
|
(In thousands)
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||||
Operating expenses
|
$
|
4,314
|
|
|
$
|
3,833
|
|
|
$
|
481
|
|
|
$
|
8,571
|
|
|
$
|
7,055
|
|
|
$
|
1,516
|
|
Stock-based compensation
|
3,348
|
|
|
2,958
|
|
|
390
|
|
|
6,047
|
|
|
6,366
|
|
|
(319
|
)
|
||||||
Depreciation
|
1,509
|
|
|
1,414
|
|
|
95
|
|
|
2,971
|
|
|
2,809
|
|
|
162
|
|
||||||
Amortization of intangible assets
|
7,981
|
|
|
7,642
|
|
|
339
|
|
|
15,961
|
|
|
15,111
|
|
|
850
|
|
||||||
Total corporate-level activity
|
$
|
17,152
|
|
|
$
|
15,847
|
|
|
$
|
1,305
|
|
|
$
|
33,550
|
|
|
$
|
31,341
|
|
|
$
|
2,209
|
|
(In thousands, except percentages)
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||||
Services cost of revenue
|
$
|
30,771
|
|
|
$
|
56,233
|
|
|
$
|
(25,462
|
)
|
|
$
|
65,712
|
|
|
$
|
127,526
|
|
|
$
|
(61,814
|
)
|
Product cost of revenue
|
25,255
|
|
|
23,137
|
|
|
2,118
|
|
|
49,355
|
|
|
48,166
|
|
|
1,189
|
|
||||||
Total cost of revenues
|
$
|
56,026
|
|
|
$
|
79,370
|
|
|
$
|
(23,344
|
)
|
|
$
|
115,067
|
|
|
$
|
175,692
|
|
|
$
|
(60,625
|
)
|
Percentage of revenues
|
47
|
%
|
|
56
|
%
|
|
|
|
39
|
%
|
|
49
|
%
|
|
|
(In thousands, except percentages)
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||||
Engineering and technology
|
$
|
5,168
|
|
|
$
|
4,817
|
|
|
$
|
351
|
|
|
$
|
10,385
|
|
|
$
|
8,952
|
|
|
$
|
1,433
|
|
Percentage of revenues
|
4
|
%
|
|
3
|
%
|
|
|
|
4
|
%
|
|
3
|
%
|
|
|
(In thousands, except percentages)
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||||
Sales and marketing
|
$
|
27,287
|
|
|
$
|
22,287
|
|
|
$
|
5,000
|
|
|
$
|
81,483
|
|
|
$
|
78,123
|
|
|
$
|
3,360
|
|
Percentage of revenues
|
23
|
%
|
|
16
|
%
|
|
|
|
28
|
%
|
|
22
|
%
|
|
|
(In thousands, except percentages)
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||||
General and administrative
|
$
|
11,014
|
|
|
$
|
10,425
|
|
|
$
|
589
|
|
|
$
|
21,423
|
|
|
$
|
19,057
|
|
|
$
|
2,366
|
|
Percentage of revenues
|
9
|
%
|
|
7
|
%
|
|
|
|
7
|
%
|
|
5
|
%
|
|
|
(In thousands, except percentages)
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||||
Depreciation
|
$
|
1,187
|
|
|
$
|
1,135
|
|
|
$
|
52
|
|
|
$
|
2,325
|
|
|
$
|
2,193
|
|
|
$
|
132
|
|
Amortization of intangible assets
|
6,118
|
|
|
5,761
|
|
|
357
|
|
|
12,236
|
|
|
11,345
|
|
|
891
|
|
||||||
Total depreciation and amortization of intangible assets
|
$
|
7,305
|
|
|
$
|
6,896
|
|
|
$
|
409
|
|
|
$
|
14,561
|
|
|
$
|
13,538
|
|
|
$
|
1,023
|
|
Percentage of revenues
|
6
|
%
|
|
5
|
%
|
|
|
|
5
|
%
|
|
4
|
%
|
|
|
(In thousands)
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
2015
|
|
2014
|
|
Change
|
||||||||||||
Interest income
|
$
|
(124
|
)
|
|
$
|
(88
|
)
|
|
$
|
(36
|
)
|
|
$
|
(242
|
)
|
|
$
|
(196
|
)
|
|
$
|
(46
|
)
|
Interest expense
|
2,492
|
|
|
2,764
|
|
|
(272
|
)
|
|
5,260
|
|
|
5,779
|
|
|
(519
|
)
|
||||||
Amortization of debt issuance costs
|
295
|
|
|
284
|
|
|
11
|
|
|
643
|
|
|
565
|
|
|
78
|
|
||||||
Accretion of debt discounts
|
958
|
|
|
916
|
|
|
42
|
|
|
2,089
|
|
|
1,822
|
|
|
267
|
|
||||||
Realized loss on available-for-sale investments, net
|
353
|
|
|
—
|
|
|
353
|
|
|
417
|
|
|
—
|
|
|
417
|
|
||||||
Other-than-temporary impairment loss on equity securities
|
964
|
|
|
—
|
|
|
964
|
|
|
964
|
|
|
—
|
|
|
964
|
|
||||||
Gain on third party bankruptcy settlement
|
(366
|
)
|
|
(167
|
)
|
|
(199
|
)
|
|
(842
|
)
|
|
(167
|
)
|
|
(675
|
)
|
||||||
Other
|
5
|
|
|
15
|
|
|
(10
|
)
|
|
14
|
|
|
(10
|
)
|
|
24
|
|
||||||
Other loss, net
|
$
|
4,577
|
|
|
$
|
3,724
|
|
|
$
|
853
|
|
|
$
|
8,303
|
|
|
$
|
7,793
|
|
|
$
|
510
|
|
(In thousands)
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income
|
$
|
4,251
|
|
|
$
|
8,737
|
|
|
$
|
27,351
|
|
|
$
|
34,724
|
|
Stock-based compensation
|
3,348
|
|
|
2,958
|
|
|
6,047
|
|
|
6,366
|
|
||||
Depreciation and amortization of intangible assets
|
9,490
|
|
|
9,056
|
|
|
18,932
|
|
|
17,920
|
|
||||
Other loss, net
|
4,577
|
|
|
3,724
|
|
|
8,303
|
|
|
7,793
|
|
||||
Income tax expense
|
3,348
|
|
|
5,313
|
|
|
15,229
|
|
|
19,873
|
|
||||
Adjusted EBITDA
|
$
|
25,014
|
|
|
$
|
29,788
|
|
|
$
|
75,862
|
|
|
$
|
86,676
|
|
(In thousands, except per share amounts)
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net income
|
$
|
4,251
|
|
|
$
|
8,737
|
|
|
$
|
27,351
|
|
|
$
|
34,724
|
|
Stock-based compensation
|
3,348
|
|
|
2,958
|
|
|
6,047
|
|
|
6,366
|
|
||||
Amortization of acquired intangible assets
|
7,981
|
|
|
7,642
|
|
|
15,961
|
|
|
15,111
|
|
||||
Accretion of debt discount on Convertible Senior Notes
|
958
|
|
|
890
|
|
|
1,898
|
|
|
1,764
|
|
||||
Other-than-temporary impairment loss on equity securities
|
964
|
|
|
—
|
|
|
964
|
|
|
—
|
|
||||
Cash tax impact of adjustments to GAAP net income
|
(118
|
)
|
|
(197
|
)
|
|
(260
|
)
|
|
(251
|
)
|
||||
Non-cash income tax expense
|
2,577
|
|
|
3,878
|
|
|
10,977
|
|
|
16,197
|
|
||||
Non-GAAP net income
|
$
|
19,961
|
|
|
$
|
23,908
|
|
|
$
|
62,938
|
|
|
$
|
73,911
|
|
|
|
|
|
|
|
|
|
||||||||
Per diluted share:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
0.10
|
|
|
$
|
0.20
|
|
|
$
|
0.65
|
|
|
$
|
0.79
|
|
Stock-based compensation
|
0.08
|
|
|
0.07
|
|
|
0.15
|
|
|
0.15
|
|
||||
Amortization of acquired intangible assets
|
0.19
|
|
|
0.17
|
|
|
0.38
|
|
|
0.34
|
|
||||
Accretion of debt discount on Convertible Senior Notes
|
0.02
|
|
|
0.02
|
|
|
0.05
|
|
|
0.04
|
|
||||
Other-than-temporary impairment loss on equity securities
|
0.03
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
||||
Cash tax impact of adjustments to GAAP net income
|
(0.00
|
)
|
|
(0.00
|
)
|
|
(0.01
|
)
|
|
(0.00
|
)
|
||||
Non-cash income tax expense
|
0.06
|
|
|
0.09
|
|
|
0.26
|
|
|
0.37
|
|
||||
Non-GAAP net income per share
|
$
|
0.48
|
|
|
$
|
0.55
|
|
|
$
|
1.50
|
|
|
$
|
1.69
|
|
Weighted average shares outstanding used in computing diluted non-GAAP net income per share and its components
|
41,936
|
|
|
43,084
|
|
|
41,918
|
|
|
43,803
|
|
(In thousands)
|
Six months ended June 30,
|
||||||
|
2015
|
|
2014
|
||||
Net cash provided by operating activities
|
$
|
34,690
|
|
|
$
|
35,250
|
|
Net cash provided (used) by investing activities
|
13,523
|
|
|
(48,793
|
)
|
||
Net cash used by financing activities
|
(35,159
|
)
|
|
(46,918
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
$
|
13,054
|
|
|
$
|
(60,461
|
)
|
•
|
expenses related to the acquisition process, both for consummated and unconsummated transactions, and impairment charges to goodwill and other intangible assets related to certain acquisitions;
|
•
|
diversion of management’s or other key personnel’s attention from current operations and other business concerns and potential strain on financial and managerial controls and reporting systems and procedures;
|
•
|
disruption of our ongoing business or the acquired business, including impairment of existing relationships with the employees, distributors, suppliers, or customers of our existing businesses or those of the acquired companies;
|
•
|
difficulties in assimilating the operations, products, technology, information systems, and management and other personnel of acquired companies that result in unanticipated allocation of resources, costs, or delays;
|
•
|
the dilutive effect on earnings per share as a result of issuances of stock, incurring operating losses, and the amortization of intangible assets for the acquired business;
|
•
|
stock volatility due to the perceived value of the acquired business by investors;
|
•
|
any debt incurred to finance acquisitions would increase costs, may increase volatility in our stock price, and could accelerate a decline in stockholder equity in the event of poor financial performance;
|
•
|
diversion of capital from other uses;
|
•
|
failure to achieve the anticipated benefits of the acquisitions in a timely manner, or at all;
|
•
|
difficulties in acquiring foreign companies, including risks related to integrating operations across different cultures and languages, currency risks, and the particular economic, political, and regulatory risks associated with specific countries; and
|
•
|
adverse outcome of litigation matters or other contingent liabilities assumed in or arising out of the acquisitions.
|
•
|
actual or anticipated variations in quarterly and annual results of operations;
|
•
|
announcements of significant acquisitions, dispositions, charges, changes in or loss of material contracts and relationships, or other business developments by us, our partners, or our competitors;
|
•
|
conditions or trends in the search and content services, tax preparation, or e-commerce markets;
|
•
|
changes in general conditions in the U.S. and global economies or financial markets;
|
•
|
announcements of technological innovations or new services by us or our competitors;
|
•
|
changes in financial estimates or recommendations by securities analysts;
|
•
|
disclosures of any accounting issues, such as restatements or material weaknesses in internal control over financial reporting;
|
•
|
equity issuances resulting in the dilution of stockholders;
|
•
|
the adoption of new regulations or accounting standards;
|
•
|
adverse publicity (whether justified or not) with respect to our business; and
|
•
|
announcements or publicity relating to litigation or governmental enforcement actions.
|
•
|
changes in our relationships with Google, Yahoo!, or future significant Search Customers, such as alterations to their policies, policy enforcement, revenue share agreements, or qualitative scoring of traffic we direct to their advertiser networks, any of which may result in a potential or total loss of content we may use or provide to our distribution partners;
|
•
|
the loss, termination, or reduction in scope of key search distribution relationships as a result of, for example, distribution partners licensing content directly from our Search Customers or other content providers, or any suspension by our Search Customers (particularly Google) of our right to use or distribute content on the web properties of our distribution partners;
|
•
|
the inability of any of our businesses to meet our expectations;
|
•
|
the extreme seasonality of our TaxACT business and the resulting large quarterly fluctuations in our revenues;
|
•
|
the success or failure of our strategic initiatives and our ability to implement those initiatives in a cost effective manner;
|
•
|
the mix of search services revenue generated by our owned and operated web properties versus our distribution partners’ web properties;
|
•
|
the mix of revenues generated by existing businesses, or other businesses we develop or acquire;
|
•
|
our ability and our distribution partners’ abilities to attract and retain quality traffic for our search services;
|
•
|
gains or losses driven by mark to market fair value accounting;
|
•
|
litigation expenses and settlement costs;
|
•
|
expenses incurred in finding, evaluating, negotiating, consummating, and integrating acquisitions;
|
•
|
variable demand for our services, rapidly evolving technologies and markets, and consumer preferences;
|
•
|
any restructuring charges we may incur;
|
•
|
any economic downturn, which may lead to lower online advertising revenue from advertisers in our Search and Content business, lower acceptance rates on premium products and services offered by our Tax Preparation business, and reduced sales for our E-Commerce business;
|
•
|
new court rulings, or the adoption of new laws, rules, or regulations, that adversely affect our ability to acquire content and distribute our search services, that adversely affect our tax preparation products and services, or that otherwise increase our potential liability or compliance costs;
|
•
|
impairment in the value of long-lived assets or the value of acquired assets, including goodwill, core technology, and acquired contracts and relationships; and
|
•
|
the effect of changes in accounting principles or standards or in our accounting treatment of revenues or expenses.
|
•
|
increasing Monoprice’s or TaxACT’s vulnerability to downturns in their businesses, to competitive pressures, and to adverse economic and industry conditions;
|
•
|
requiring the dedication of a portion of our expected cash from Monoprice’s and TaxACT’s operations to service the indebtedness, thereby reducing the amount of expected cash flow available for other purposes, including capital expenditures and acquisitions;
|
•
|
requiring cash infusions from Blucora to Monoprice or TaxACT if either or both are unable to meet their payment or other obligations under the applicable credit facilities;
|
•
|
increasing our interest payment obligations in the event that interest rates rise dramatically; and
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our businesses and our industries.
|
•
|
the classification of our board of directors into three groups so that directors serve staggered three-year terms, which may make it difficult for a potential acquirer to gain control of our board of directors;
|
•
|
the requirement for super majority approval by stockholders for certain business combinations;
|
•
|
the ability of our board of directors to authorize the issuance of shares of undesignated preferred stock without a vote by stockholders;
|
•
|
the ability of our board of directors to amend or repeal our bylaws;
|
•
|
limitations on the removal of directors;
|
•
|
limitations on stockholders’ ability to call special stockholder meetings;
|
•
|
advance notice requirements for nominating candidates for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; and
|
•
|
certain restrictions in our charter on transfers of our common stock designed to preserve our federal net operating loss carryforwards (“
NOLs
”).
|
•
|
Accurately predict features that are compelling to customers;
|
•
|
Acquire or develop technology to incorporate those features in our products;
|
•
|
Ensure that the design of products is appealing to consumers;
|
•
|
Arrange for the manufacture and delivery of a sufficient amount of the products on a timely and cost-effective basis; and
|
•
|
Ensure that the products are of sufficient quality to maintain customer satisfaction.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet be Purchased under the Plans or Programs
|
||||||
April 1-30, 2015
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
32,019
|
|
May 1-31, 2015
|
|
61
|
|
|
$
|
16.16
|
|
|
61
|
|
|
$
|
31,035
|
|
June 1-30, 2015
|
|
6
|
|
|
$
|
16.13
|
|
|
6
|
|
|
$
|
30,946
|
|
Total
|
|
67
|
|
|
$
|
16.16
|
|
|
67
|
|
|
|
|
BLUCORA, INC.
|
|
|
|
|
|
By
|
/s/ Eric M. Emans
|
|
|
Eric M. Emans
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
|
|
July 30, 2015
|
Exhibit
Number
|
|
Exhibit Description
|
|
Form
|
|
Date of First Filing
|
|
Exhibit Number
|
|
Filed
Herewith
|
10.1*
|
|
Blucora, Inc. 2015 Incentive Plan
|
|
S-8
|
|
May 29, 2015
|
|
99.1
|
|
|
10.2*
|
|
Form of Nonqualified Stock Option Grant Notice and Stock Option Agreement for Executives
|
|
|
|
|
|
|
|
X
|
10.3*
|
|
Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement for Executives
|
|
|
|
|
|
|
|
X
|
31.1
|
|
Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
X
|
31.2
|
|
Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
X
|
32.1
|
|
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
X
|
32.2
|
|
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
X
|
101
|
|
The following financial statements from the Company's 10-Q for the fiscal quarter ended June 30, 2015, formatted in XBRL: (i) Unaudited Condensed Consolidated Balance Sheets, (ii) Unaudited Condensed Consolidated Statements of Operations, (iii) Unaudited Condensed Consolidated Statements of Cash Flows, and (iv) Notes to Unaudited Condensed Consolidated Financial Statements
|
|
|
|
|
|
|
|
X
|
|
BLUCORA, INC.
By:
____________________
Its:
____________________
|
|
OPTIONEE
____________________
Signature
|
|
|
Date:
___________________
|
Attachments:
1. Stock Option Agreement
2. 2015 Incentive Plan
|
|
Address:
________________
________________
Tax ID:
__________________
|
BLUCORA, INC.
By:_____________________
Its:
______________________
|
|
EMPLOYEE
_____________________
Signature
|
|
|
Date:
____________________
|
Attachments:
1. Restricted Stock Unit Agreement
2. 2015 Incentive Plan
|
|
Address:
_________________
Taxpayer ID:
______________
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Blucora, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ William J. Ruckelshaus
|
|
William J. Ruckelshaus
|
|
Chief Executive Officer and President
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Blucora, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
/s/ Eric M. Emans
|
|
Eric M. Emans
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
By:
|
/s/ William J. Ruckelshaus
|
|
Name:
|
William J. Ruckelshaus
|
|
Title:
|
Chief Executive Officer and President
(Principal Executive Officer)
|
|
By:
|
/s/ Eric M. Emans
|
|
Name:
|
Eric M. Emans
|
|
Title:
|
Chief Financial Officer
(Principal Financial Officer)
|