|
|
|
|
|
DELAWARE
|
000-25131
|
91-1718107
|
(State or other jurisdiction
of incorporation)
|
(Commission
File Number)
|
(I.R.S. Employer
Identification No.)
|
|
o
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
o
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
o
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
o
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
|
|
BLUCORA, INC.
|
|
|
|
|
|
By
|
/s/ John S. Clendening
|
|
|
John S. Clendening
|
|
|
Chief Executive Officer and President
|
|
|
|
|
|
February 15, 2018
|
1.
|
Certain Definitions
|
2.
|
Duties and Scope of Employment
|
3.
|
Obligations
|
4.
|
Agreement Term
|
5.
|
Compensation and Benefits
|
6.
|
Termination of Employment
|
7.
|
Section 280G
|
8.
|
No Impediment to Agreement
|
9.
|
Confidentiality and Non-Competition Agreement
|
10.
|
Cooperation
|
11.
|
Arbitration
|
12.
|
Successors; Personal Services
|
13.
|
Notices
|
14.
|
Section 409A
|
15.
|
Miscellaneous Provisions
|
BLUCORA, INC.
|
|
By:
/s/ John S. Clendening
|
Name: John S. Clendening
|
Title: President and Chief Executive Officer
|
|
|
|
EXECUTIVE:
|
|
/s/ Davinder Athwal
|
Davinder Athwal
|
|
|
EXECUTIVE:
|
Signature:
/s/ Davinder Athwal
|
|
Printed Name: Davinder Athwal
|
|
Date: February 12, 2018
|
|
|
THE COMPANY:
|
Blucora, Inc.:
|
|
Signature:
/s/ John S. Clendening
|
|
Name: John S. Clendening
|
|
Title: Chief Executive Officer and President
|
|
Date: February 12, 2018
|
|
|
Title
|
Date
|
Identifying Number or Brief Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Signature of Employee
|
|
Print Name of Employee
|
|
Date
|
1.
|
Termination of Employment
|
2.
|
Consideration
|
3.
|
Waiver and Release
|
4.
|
No Interference
|
5.
|
No Admission of Wrongdoing
|
6.
|
Legal Disclosure.
|
7.
|
Binding Agreement; Successors and Assigns
|
8.
|
Other Agreements
|
9.
|
Knowing and Voluntary Agreement; Consideration and Revocation Periods
|
10.
|
Disclaimer of Reliance
|
11.
|
Execution in Multiple Counterparts
|
12.
|
Effective Date
|
EXECUTIVE:
|
Signature: _________________
|
|
Printed Name:
Davinder Athwal
|
|
Date: _____________________
|
|
|
THE COMPANY:
|
Blucora, Inc.:
|
|
Signature: __________________
|
|
Name: _____________________
|
|
Title: ______________________
|
|
Date: ______________________
|
|
|
•
|
Increased total revenue by 12% year-over-year
|
•
|
Grew assets under management by 21% year-over-year to $12.5 billion, total assets under administration by 14% year-over-year to $44.2 billion at HD Vest
|
•
|
Achieved 20
th
consecutive year of revenue growth at TaxAct, growing 15% year-over-year
|
•
|
Lowered debt by $90 million, reduced net leverage ratio to 2.8x from 4.0x vs. prior year and lowered interest rate by 300 bps
|
•
|
Announced clearing transition expected to generate $60-$100 million in incremental HD Vest segment income over 10-year term
|
•
|
Announced appointment of Davinder Athwal as CFO effective February 21, 2018
|
|
Three months ended December 31,
|
|
Years ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Wealth management services revenue
|
$
|
93,848
|
|
|
$
|
83,050
|
|
|
$
|
348,620
|
|
|
$
|
316,546
|
|
Tax preparation services revenue
|
4,001
|
|
|
3,751
|
|
|
160,937
|
|
|
139,365
|
|
||||
Total revenue
|
97,849
|
|
|
86,801
|
|
|
509,557
|
|
|
455,911
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of revenue:
|
|
|
|
|
|
|
|
||||||||
Wealth management services cost of revenue
|
63,415
|
|
|
55,783
|
|
|
235,859
|
|
|
213,996
|
|
||||
Tax preparation services cost of revenue
|
2,475
|
|
|
1,819
|
|
|
10,018
|
|
|
8,368
|
|
||||
Amortization of acquired technology
|
50
|
|
|
47
|
|
|
195
|
|
|
812
|
|
||||
Total cost of revenue
(1)
|
65,940
|
|
|
57,649
|
|
|
246,072
|
|
|
223,176
|
|
||||
Engineering and technology
(1)
|
5,573
|
|
|
4,938
|
|
|
19,614
|
|
|
17,780
|
|
||||
Sales and marketing
(1)
|
17,824
|
|
|
13,645
|
|
|
102,798
|
|
|
89,360
|
|
||||
General and administrative
(1)
|
13,263
|
|
|
11,497
|
|
|
52,668
|
|
|
47,396
|
|
||||
Depreciation
|
780
|
|
|
975
|
|
|
3,460
|
|
|
3,881
|
|
||||
Amortization of other acquired intangible assets
|
8,615
|
|
|
8,402
|
|
|
33,807
|
|
|
33,331
|
|
||||
Restructuring
(1)
|
375
|
|
|
3,870
|
|
|
3,101
|
|
|
3,870
|
|
||||
Total operating expenses
|
112,370
|
|
|
100,976
|
|
|
461,520
|
|
|
418,794
|
|
||||
Operating income (loss)
|
(14,521
|
)
|
|
(14,175
|
)
|
|
48,037
|
|
|
37,117
|
|
||||
Other loss, net
(2)
|
(5,402
|
)
|
|
(9,898
|
)
|
|
(44,551
|
)
|
|
(39,781
|
)
|
||||
Income (loss) from continuing operations before income taxes
|
(19,923
|
)
|
|
(24,073
|
)
|
|
3,486
|
|
|
(2,664
|
)
|
||||
Income tax benefit
(3)
|
31,842
|
|
|
10,184
|
|
|
25,890
|
|
|
1,285
|
|
||||
Income (loss) from continuing operations
|
11,919
|
|
|
(13,889
|
)
|
|
29,376
|
|
|
(1,379
|
)
|
||||
Discontinued operations, net of income taxes
(4)
|
—
|
|
|
(5,140
|
)
|
|
—
|
|
|
(63,121
|
)
|
||||
Net income (loss)
|
11,919
|
|
|
(19,029
|
)
|
|
29,376
|
|
|
(64,500
|
)
|
||||
Net income attributable to noncontrolling interests
|
(1,871
|
)
|
|
(232
|
)
|
|
(2,337
|
)
|
|
(658
|
)
|
||||
Net income (loss) attributable to Blucora, Inc.
|
$
|
10,048
|
|
|
$
|
(19,261
|
)
|
|
$
|
27,039
|
|
|
$
|
(65,158
|
)
|
Net income (loss) per share attributable to Blucora, Inc. - basic:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.22
|
|
|
$
|
(0.34
|
)
|
|
$
|
0.61
|
|
|
$
|
(0.05
|
)
|
Discontinued operations
|
—
|
|
|
(0.12
|
)
|
|
—
|
|
|
(1.52
|
)
|
||||
Basic net income (loss) per share
|
$
|
0.22
|
|
|
$
|
(0.46
|
)
|
|
$
|
0.61
|
|
|
$
|
(1.57
|
)
|
Net income (loss) per share attributable to Blucora, Inc. - diluted:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.21
|
|
|
$
|
(0.34
|
)
|
|
$
|
0.57
|
|
|
$
|
(0.05
|
)
|
Discontinued operations
|
—
|
|
|
(0.12
|
)
|
|
—
|
|
|
(1.52
|
)
|
||||
Diluted net income (loss) per share
|
$
|
0.21
|
|
|
$
|
(0.46
|
)
|
|
$
|
0.57
|
|
|
$
|
(1.57
|
)
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
46,231
|
|
|
41,766
|
|
|
44,370
|
|
|
41,494
|
|
||||
Diluted
|
48,406
|
|
|
41,766
|
|
|
47,211
|
|
|
41,494
|
|
|
Years ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
Operating Activities:
|
|
|
|
||||
Net income (loss)
|
$
|
29,376
|
|
|
$
|
(64,500
|
)
|
Less: Discontinued operations, net of income taxes
|
—
|
|
|
(63,121
|
)
|
||
Net income (loss) from continuing operations
|
29,376
|
|
|
(1,379
|
)
|
||
Adjustments to reconcile net income (loss) from continuing operations to net cash from operating activities:
|
|
|
|
||||
Stock-based compensation
|
11,653
|
|
|
14,128
|
|
||
Depreciation and amortization of acquired intangible assets
|
38,139
|
|
|
38,688
|
|
||
Restructuring (non-cash)
|
1,569
|
|
|
(364
|
)
|
||
Deferred income taxes
|
(16,159
|
)
|
|
(18,055
|
)
|
||
Amortization of premium on investments, net
|
10
|
|
|
174
|
|
||
Amortization of debt issuance costs
|
1,089
|
|
|
1,840
|
|
||
Accretion of debt discounts
|
1,947
|
|
|
4,690
|
|
||
Loss on debt extinguishment and modification expense
|
20,445
|
|
|
1,036
|
|
||
Revaluation of acquisition-related contingent consideration liability
|
—
|
|
|
391
|
|
||
Other
|
30
|
|
|
19
|
|
||
Cash provided (used) by changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(483
|
)
|
|
(2,340
|
)
|
||
Commissions receivable
|
(678
|
)
|
|
184
|
|
||
Other receivables
|
(204
|
)
|
|
22,875
|
|
||
Prepaid expenses and other current assets
|
(869
|
)
|
|
3,741
|
|
||
Other long-term assets
|
(12,281
|
)
|
|
(887
|
)
|
||
Accounts payable
|
(123
|
)
|
|
(153
|
)
|
||
Commissions and advisory fees payable
|
1,226
|
|
|
(395
|
)
|
||
Deferred revenue
|
(3,248
|
)
|
|
582
|
|
||
Accrued expenses and other current and long-term liabilities
|
1,407
|
|
|
21,195
|
|
||
Net cash provided by operating activities from continuing operations
|
72,846
|
|
|
85,970
|
|
||
Investing Activities:
|
|
|
|
||||
Business acquisitions, net of cash acquired
|
—
|
|
|
(1,788
|
)
|
||
Purchases of property and equipment
|
(5,039
|
)
|
|
(3,812
|
)
|
||
Proceeds from sales of investments
|
249
|
|
|
—
|
|
||
Proceeds from maturities of investments
|
7,252
|
|
|
12,807
|
|
||
Purchases of investments
|
(409
|
)
|
|
(8,767
|
)
|
||
Net cash provided (used) by investing activities from continuing operations
|
2,053
|
|
|
(1,560
|
)
|
||
Financing Activities:
|
|
|
|
||||
Proceeds from credit facility, net of debt issuance costs and debt discount of $5,913 and $1,875 in 2017
|
365,836
|
|
|
—
|
|
||
Repurchase of convertible notes
|
(172,827
|
)
|
|
(20,667
|
)
|
||
Repayment of credit facility
|
(290,000
|
)
|
|
(140,000
|
)
|
||
Repayment of note payable with related party
|
(3,200
|
)
|
|
(3,200
|
)
|
||
Proceeds from stock option exercises
|
40,271
|
|
|
2,216
|
|
||
Proceeds from issuance of stock through employee stock purchase plan
|
1,429
|
|
|
1,402
|
|
||
Tax payments from shares withheld for equity awards
|
(9,095
|
)
|
|
(1,752
|
)
|
||
Contingent consideration payments for business acquisition
|
(946
|
)
|
|
—
|
|
||
Other
|
(30
|
)
|
|
—
|
|
||
Net cash used in financing activities from continuing operations
|
(68,562
|
)
|
|
(162,001
|
)
|
||
Net cash provided (used) by continuing operations
|
6,337
|
|
|
(77,591
|
)
|
||
|
|
|
|
||||
Net cash provided by operating activities from discontinued operations
|
—
|
|
|
14,047
|
|
||
Net cash provided by investing activities from discontinued operations
|
1,028
|
|
|
83,608
|
|
||
Net cash used in financing activities from discontinued operations
|
—
|
|
|
(25,000
|
)
|
||
Net cash provided by discontinued operations
|
1,028
|
|
|
72,655
|
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
78
|
|
|
(26
|
)
|
||
Net increase (decrease) in cash, cash equivalents, and restricted cash
|
7,443
|
|
|
(4,962
|
)
|
||
Cash and cash equivalents, beginning of period
|
54,868
|
|
|
59,830
|
|
||
Cash and cash equivalents, end of period
|
$
|
62,311
|
|
|
$
|
54,868
|
|
|
Three months ended December 31,
|
|
Years ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Wealth Management
(1)
|
$
|
93,848
|
|
|
$
|
83,050
|
|
|
$
|
348,620
|
|
|
$
|
316,546
|
|
Tax Preparation
(1)
|
4,001
|
|
|
3,751
|
|
|
160,937
|
|
|
139,365
|
|
||||
Total revenue
|
97,849
|
|
|
86,801
|
|
|
509,557
|
|
|
455,911
|
|
||||
Operating income (loss):
|
|
|
|
|
|
|
|
||||||||
Wealth Management
|
14,232
|
|
|
13,838
|
|
|
50,916
|
|
|
46,296
|
|
||||
Tax Preparation
|
(10,489
|
)
|
|
(6,090
|
)
|
|
72,921
|
|
|
66,897
|
|
||||
Corporate-level activity
(2)
|
(18,264
|
)
|
|
(21,923
|
)
|
|
(75,800
|
)
|
|
(76,076
|
)
|
||||
Total operating income (loss)
|
(14,521
|
)
|
|
(14,175
|
)
|
|
48,037
|
|
|
37,117
|
|
||||
Other loss, net
|
(5,402
|
)
|
|
(9,898
|
)
|
|
(44,551
|
)
|
|
(39,781
|
)
|
||||
Income tax benefit
|
31,842
|
|
|
10,184
|
|
|
25,890
|
|
|
1,285
|
|
||||
Discontinued operations, net of income taxes
|
—
|
|
|
(5,140
|
)
|
|
—
|
|
|
(63,121
|
)
|
||||
Net income (loss)
|
$
|
11,919
|
|
|
$
|
(19,029
|
)
|
|
$
|
29,376
|
|
|
$
|
(64,500
|
)
|
|
Three months ended December 31,
|
|
Years ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income (loss) attributable to Blucora, Inc.
|
$
|
10,048
|
|
|
$
|
(19,261
|
)
|
|
$
|
27,039
|
|
|
$
|
(65,158
|
)
|
Stock-based compensation
|
3,219
|
|
|
3,512
|
|
|
11,653
|
|
|
14,128
|
|
||||
Depreciation and amortization of acquired intangible assets
|
9,586
|
|
|
9,608
|
|
|
38,139
|
|
|
38,688
|
|
||||
Restructuring
|
375
|
|
|
3,870
|
|
|
3,101
|
|
|
3,870
|
|
||||
Other loss, net
|
5,402
|
|
|
9,898
|
|
|
44,551
|
|
|
39,781
|
|
||||
Net income attributable to noncontrolling interests
|
1,871
|
|
|
232
|
|
|
2,337
|
|
|
658
|
|
||||
Income tax expense (benefit)
|
(31,842
|
)
|
|
(10,184
|
)
|
|
(25,890
|
)
|
|
(1,285
|
)
|
||||
Discontinued operations, net of income taxes
|
—
|
|
|
5,140
|
|
|
—
|
|
|
63,121
|
|
||||
Acquisition-related costs
|
—
|
|
|
—
|
|
|
—
|
|
|
391
|
|
||||
Adjusted EBITDA
|
$
|
(1,341
|
)
|
|
$
|
2,815
|
|
|
$
|
100,930
|
|
|
$
|
94,194
|
|
|
Three months ended December 31,
|
|
Years ended December 31,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net loss attributable to Blucora, Inc.
(2)
|
$
|
10,048
|
|
|
$
|
(19,261
|
)
|
|
$
|
27,039
|
|
|
$
|
(65,158
|
)
|
Discontinued operations, net of income taxes
|
—
|
|
|
5,140
|
|
|
—
|
|
|
63,121
|
|
||||
Stock-based compensation
|
3,219
|
|
|
3,512
|
|
|
11,653
|
|
|
14,128
|
|
||||
Amortization of acquired intangible assets
|
8,665
|
|
|
8,449
|
|
|
34,002
|
|
|
34,143
|
|
||||
Accretion of debt discount on Convertible Senior Notes
|
—
|
|
|
917
|
|
|
1,567
|
|
|
3,666
|
|
||||
Accelerated accretion of debt discount on Convertible Senior Notes
|
—
|
|
|
—
|
|
|
—
|
|
|
1,628
|
|
||||
Gain on the Notes repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,724
|
)
|
||||
Write-off of debt discount and debt issuance costs on terminated Convertible Senior Notes
|
—
|
|
|
—
|
|
|
6,715
|
|
|
—
|
|
||||
Write-off of debt discount and debt issuance costs on closed TaxAct - HD Vest 2015 credit facility
|
—
|
|
|
—
|
|
|
9,593
|
|
|
—
|
|
||||
Acquisition-related costs
|
—
|
|
|
—
|
|
|
—
|
|
|
391
|
|
||||
Restructuring
|
375
|
|
|
3,870
|
|
|
3,101
|
|
|
3,870
|
|
||||
Impact of noncontrolling interests
|
1,871
|
|
|
232
|
|
|
2,337
|
|
|
658
|
|
||||
Cash tax impact of adjustments to GAAP net income
|
3,328
|
|
|
(69
|
)
|
|
(6
|
)
|
|
175
|
|
||||
Non-cash income tax benefit
(1)
|
(33,178
|
)
|
|
(10,262
|
)
|
|
(26,853
|
)
|
|
(3,802
|
)
|
||||
Non-GAAP net income (loss)
|
$
|
(5,672
|
)
|
|
$
|
(7,472
|
)
|
|
$
|
69,148
|
|
|
$
|
45,096
|
|
|
|
|
|
|
|
|
|
||||||||
Per diluted share:
|
|
|
|
|
|
|
|
||||||||
Net loss attributable to Blucora, Inc.
(2)
|
$
|
0.21
|
|
|
$
|
(0.46
|
)
|
|
$
|
0.57
|
|
|
$
|
(1.53
|
)
|
Discontinued operations, net of income taxes
|
—
|
|
|
0.12
|
|
|
—
|
|
|
1.48
|
|
||||
Stock-based compensation
|
0.07
|
|
|
0.08
|
|
|
0.25
|
|
|
0.33
|
|
||||
Amortization of acquired intangible assets
|
0.20
|
|
|
0.21
|
|
|
0.72
|
|
|
0.80
|
|
||||
Accretion of debt discount on Convertible Senior Notes
|
—
|
|
|
0.02
|
|
|
0.03
|
|
|
0.09
|
|
||||
Accelerated accretion of debt discount on Convertible Senior Notes
|
—
|
|
|
—
|
|
|
—
|
|
|
0.04
|
|
||||
Gain on the Notes repurchased
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.18
|
)
|
||||
Write-off of debt issuance costs on closed TaxAct 2013 credit facility
|
—
|
|
|
—
|
|
|
0.14
|
|
|
—
|
|
||||
Write-off of debt discount and debt issuance costs on terminated Convertible Senior Notes
|
—
|
|
|
—
|
|
|
0.20
|
|
|
—
|
|
||||
Acquisition-related costs
|
—
|
|
|
—
|
|
|
—
|
|
|
0.01
|
|
||||
Restructuring
|
0.01
|
|
|
0.09
|
|
|
0.07
|
|
|
0.09
|
|
||||
Impact of noncontrolling interests
|
0.04
|
|
|
0.01
|
|
|
0.05
|
|
|
0.02
|
|
||||
Cash tax impact of adjustments to GAAP net income
|
0.07
|
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
||||
Non-cash income tax benefit
|
(0.72
|
)
|
|
(0.25
|
)
|
|
(0.57
|
)
|
|
(0.09
|
)
|
||||
Non-GAAP net income (loss)
|
$
|
(0.12
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
1.46
|
|
|
$
|
1.06
|
|
Weighted average shares outstanding used in computing per diluted share amounts
|
46,231
|
|
|
41,766
|
|
|
47,211
|
|
|
42,686
|
|
|
Ranges for the three months ending
|
||||||
|
March 31, 2018
|
||||||
|
Low
|
|
High
|
||||
Net income (loss) attributable to Blucora, Inc.
|
$
|
29,900
|
|
|
$
|
36,000
|
|
Stock-based compensation
|
3,700
|
|
|
3,600
|
|
||
Depreciation and amortization of acquired intangible assets
|
9,200
|
|
|
9,200
|
|
||
Restructuring
|
400
|
|
|
300
|
|
||
Other loss, net
(3)
|
5,900
|
|
|
5,600
|
|
||
Impact of noncontrolling interests
|
200
|
|
|
200
|
|
||
Income tax expense
|
3,300
|
|
|
1,900
|
|
||
Adjusted EBITDA
|
$
|
52,600
|
|
|
$
|
56,800
|
|
|
Ranges for the three months ending
|
||||||
|
March 31, 2018
|
||||||
Net income (loss) attributable to Blucora, Inc.
|
$
|
29,900
|
|
|
$
|
36,000
|
|
Stock-based compensation
|
3,700
|
|
|
3,600
|
|
||
Amortization of acquired intangible assets
|
8,400
|
|
|
8,400
|
|
||
Restructuring
|
400
|
|
|
300
|
|
||
Impact of noncontrolling interests
|
200
|
|
|
200
|
|
||
Cash tax impact of adjustments to net income (loss)
|
(400
|
)
|
|
(300
|
)
|
||
Non-cash income tax expense
|
2,800
|
|
|
1,500
|
|
||
Non-GAAP income from continuing operations
|
$
|
45,000
|
|
|
$
|
49,700
|
|
Financial Information
|
|
|
|
Operating Metrics
|
|
(in thousands except %s and per share amounts, rounding differences may exist)
|
2015
|
|
2016
|
|
2017
|
|
||||||||||||||||||||||||||||||||||||||
FY 12/31
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
FY 12/31
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
FY 12/31
|
|
|||||||||||||||||||||||
|
pro forma
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
||||||||||||||||||||||
Segment revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Wealth Management
(1)
|
$
|
319,739
|
|
|
$
|
77,291
|
|
|
$
|
76,117
|
|
|
$
|
80,088
|
|
|
$
|
83,050
|
|
|
$
|
316,546
|
|
|
$
|
82,667
|
|
|
$
|
85,296
|
|
|
$
|
86,809
|
|
|
$
|
93,848
|
|
|
$
|
348,620
|
|
|
Tax Preparation
(2)
|
117,708
|
|
|
88,474
|
|
|
43,991
|
|
|
3,149
|
|
|
3,751
|
|
|
139,365
|
|
|
99,708
|
|
|
53,866
|
|
|
3,362
|
|
|
4,001
|
|
|
160,937
|
|
|
|||||||||||
Total
|
$
|
437,447
|
|
|
$
|
165,765
|
|
|
$
|
120,108
|
|
|
$
|
83,237
|
|
|
$
|
86,801
|
|
|
$
|
455,911
|
|
|
$
|
182,375
|
|
|
$
|
139,162
|
|
|
$
|
90,171
|
|
|
$
|
97,849
|
|
|
$
|
509,557
|
|
|
Segment income (loss):
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Wealth Management
(1)
|
$
|
42,997
|
|
|
$
|
10,906
|
|
|
$
|
9,924
|
|
|
$
|
11,628
|
|
|
$
|
13,838
|
|
|
$
|
46,296
|
|
|
$
|
11,853
|
|
|
$
|
12,406
|
|
|
$
|
12,425
|
|
|
$
|
14,232
|
|
|
$
|
50,916
|
|
|
Tax Preparation
(2)
|
56,984
|
|
|
47,573
|
|
|
29,796
|
|
|
(4,382
|
)
|
|
(6,090
|
)
|
|
66,897
|
|
|
53,133
|
|
|
36,515
|
|
|
(6,238
|
)
|
|
(10,489
|
)
|
|
72,921
|
|
|
|||||||||||
Total
|
$
|
99,981
|
|
|
$
|
58,479
|
|
|
$
|
39,720
|
|
|
$
|
7,246
|
|
|
$
|
7,748
|
|
|
$
|
113,193
|
|
|
$
|
64,986
|
|
|
$
|
48,921
|
|
|
$
|
6,187
|
|
|
$
|
3,743
|
|
|
$
|
123,837
|
|
|
Segment income (loss) % of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Wealth Management
(1)
|
13
|
%
|
|
14
|
%
|
|
13
|
%
|
|
15
|
%
|
|
17
|
%
|
|
15
|
%
|
|
14
|
%
|
|
15
|
%
|
|
14
|
%
|
|
15
|
%
|
|
15
|
%
|
|
|||||||||||
Tax Preparation
(2)
|
48
|
%
|
|
54
|
%
|
|
68
|
%
|
|
(139
|
)%
|
|
(162
|
)%
|
|
48
|
%
|
|
53
|
%
|
|
68
|
%
|
|
(186
|
)%
|
|
(262
|
)%
|
|
45
|
%
|
|
|||||||||||
Total
|
23
|
%
|
|
35
|
%
|
|
33
|
%
|
|
9
|
%
|
|
9
|
%
|
|
25
|
%
|
|
36
|
%
|
|
35
|
%
|
|
7
|
%
|
|
4
|
%
|
|
24
|
%
|
|
|||||||||||
Unallocated corporate operating expenses
(3)
|
$
|
17,750
|
|
|
$
|
4,699
|
|
|
$
|
4,460
|
|
|
$
|
4,907
|
|
|
$
|
4,933
|
|
|
$
|
18,999
|
|
|
$
|
6,773
|
|
|
$
|
6,463
|
|
|
$
|
4,587
|
|
|
$
|
5,084
|
|
|
$
|
22,907
|
|
|
Adjusted EBITDA
|
$
|
82,231
|
|
|
$
|
53,780
|
|
|
$
|
35,260
|
|
|
$
|
2,339
|
|
|
$
|
2,815
|
|
|
$
|
94,194
|
|
|
$
|
58,213
|
|
|
$
|
42,458
|
|
|
$
|
1,600
|
|
|
$
|
(1,341
|
)
|
|
$
|
100,930
|
|
|
Other unallocated operating expenses:
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Stock-based compensation
(4)
|
$
|
13,591
|
|
|
$
|
4,229
|
|
|
$
|
3,023
|
|
|
$
|
3,364
|
|
|
$
|
3,512
|
|
|
$
|
14,128
|
|
|
$
|
2,565
|
|
|
$
|
2,737
|
|
|
$
|
3,132
|
|
|
$
|
3,219
|
|
|
$
|
11,653
|
|
|
Acquisition-related costs
|
—
|
|
|
—
|
|
|
391
|
|
|
—
|
|
|
—
|
|
|
391
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||||||||
Depreciation
|
4,613
|
|
|
1,122
|
|
|
1,127
|
|
|
1,137
|
|
|
1,159
|
|
|
4,545
|
|
|
1,134
|
|
|
1,059
|
|
|
1,023
|
|
|
921
|
|
|
4,137
|
|
|
|||||||||||
Amortization of acquired intangible assets
(4)
|
40,851
|
|
|
8,983
|
|
|
8,365
|
|
|
8,346
|
|
|
8,449
|
|
|
34,143
|
|
|
8,336
|
|
|
8,336
|
|
|
8,665
|
|
|
8,665
|
|
|
34,002
|
|
|
|||||||||||
Restructuring
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,870
|
|
|
3,870
|
|
|
2,289
|
|
|
331
|
|
|
106
|
|
|
375
|
|
|
3,101
|
|
|
|||||||||||
Operating income (loss)
|
$
|
23,176
|
|
|
$
|
39,446
|
|
|
$
|
22,354
|
|
|
$
|
(10,508
|
)
|
|
$
|
(14,175
|
)
|
|
$
|
37,117
|
|
|
$
|
43,889
|
|
|
$
|
29,995
|
|
|
$
|
(11,326
|
)
|
|
$
|
(14,521
|
)
|
|
$
|
48,037
|
|
|
Unallocated other income/loss:
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Interest income
|
$
|
(609
|
)
|
|
$
|
(25
|
)
|
|
$
|
(11
|
)
|
|
$
|
(18
|
)
|
|
$
|
(27
|
)
|
|
$
|
(81
|
)
|
|
$
|
(20
|
)
|
|
$
|
(25
|
)
|
|
$
|
(31
|
)
|
|
$
|
(34
|
)
|
|
$
|
(110
|
)
|
|
Interest expense
(5)
|
37,059
|
|
|
9,191
|
|
|
8,381
|
|
|
7,824
|
|
|
7,028
|
|
|
32,424
|
|
|
6,436
|
|
|
5,529
|
|
|
4,781
|
|
|
4,465
|
|
|
21,211
|
|
|
|||||||||||
Amortization of debt issuance costs
(5)
|
1,894
|
|
|
610
|
|
|
417
|
|
|
413
|
|
|
400
|
|
|
1,840
|
|
|
387
|
|
|
327
|
|
|
177
|
|
|
198
|
|
|
1,089
|
|
|
|||||||||||
Accretion of debt discounts
(5)
|
4,880
|
|
|
1,406
|
|
|
1,094
|
|
|
1,099
|
|
|
1,091
|
|
|
4,690
|
|
|
1,085
|
|
|
755
|
|
|
53
|
|
|
54
|
|
|
1,947
|
|
|
|||||||||||
(Gain) loss on debt extinguishment and modification expense
(6)
|
—
|
|
|
(3,843
|
)
|
|
997
|
|
|
2,205
|
|
|
1,677
|
|
|
1,036
|
|
|
1,780
|
|
|
17,801
|
|
|
183
|
|
|
681
|
|
|
20,445
|
|
|
|||||||||||
Other (income) loss, net
|
(1,290
|
)
|
|
175
|
|
|
38
|
|
|
(70
|
)
|
|
(271
|
)
|
|
(128
|
)
|
|
40
|
|
|
(187
|
)
|
|
78
|
|
|
38
|
|
|
(31
|
)
|
|
|||||||||||
Total
|
$
|
41,934
|
|
|
$
|
7,514
|
|
|
$
|
10,916
|
|
|
$
|
11,453
|
|
|
$
|
9,898
|
|
|
$
|
39,781
|
|
|
$
|
9,708
|
|
|
$
|
24,200
|
|
|
$
|
5,241
|
|
|
$
|
5,402
|
|
|
$
|
44,551
|
|
|
Income (loss) from continuing operations before income taxes
|
$
|
(18,758
|
)
|
|
$
|
31,932
|
|
|
$
|
11,438
|
|
|
$
|
(21,961
|
)
|
|
$
|
(24,073
|
)
|
|
$
|
(2,664
|
)
|
|
$
|
34,181
|
|
|
$
|
5,795
|
|
|
$
|
(16,567
|
)
|
|
$
|
(19,923
|
)
|
|
$
|
3,486
|
|
|
Income tax (benefit) expense:
(3) (7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Cash
|
$
|
2,200
|
|
|
$
|
1,064
|
|
|
$
|
600
|
|
|
$
|
775
|
|
|
$
|
78
|
|
|
$
|
2,517
|
|
|
$
|
311
|
|
|
$
|
(626
|
)
|
|
$
|
(58
|
)
|
|
$
|
1,336
|
|
|
$
|
963
|
|
|
Non-cash
(8)
|
(9,422
|
)
|
|
10,579
|
|
|
5,193
|
|
|
(9,312
|
)
|
|
(10,262
|
)
|
|
(3,802
|
)
|
|
3,160
|
|
|
2,941
|
|
|
224
|
|
|
(33,178
|
)
|
|
(26,853
|
)
|
|
|||||||||||
Total
|
$
|
(7,222
|
)
|
|
$
|
11,643
|
|
|
$
|
5,793
|
|
|
$
|
(8,537
|
)
|
|
$
|
(10,184
|
)
|
|
$
|
(1,285
|
)
|
|
$
|
3,471
|
|
|
$
|
2,315
|
|
|
$
|
166
|
|
|
$
|
(31,842
|
)
|
|
$
|
(25,890
|
)
|
|
GAAP income (loss) from continuing operations
(9)
|
$
|
(11,536
|
)
|
|
$
|
20,289
|
|
|
$
|
5,645
|
|
|
$
|
(13,424
|
)
|
|
$
|
(13,889
|
)
|
|
$
|
(1,379
|
)
|
|
$
|
30,710
|
|
|
$
|
3,480
|
|
|
$
|
(16,733
|
)
|
|
$
|
11,919
|
|
|
$
|
29,376
|
|
|
GAAP income (loss) from continuing operations per share - diluted
|
$
|
(0.28
|
)
|
|
$
|
0.48
|
|
|
$
|
0.13
|
|
|
$
|
(0.33
|
)
|
|
$
|
(0.34
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
0.67
|
|
|
$
|
0.07
|
|
|
$
|
(0.37
|
)
|
|
$
|
0.21
|
|
|
$
|
0.57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
GAAP discontinued operations, net of income taxes
(10)
|
$
|
(27,348
|
)
|
|
$
|
2,522
|
|
|
$
|
(19,975
|
)
|
|
$
|
(40,528
|
)
|
|
$
|
(5,140
|
)
|
|
$
|
(63,121
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
GAAP impact of noncontrolling interests
(9)
|
—
|
|
|
(144
|
)
|
|
(115
|
)
|
|
(167
|
)
|
|
(232
|
)
|
|
(658
|
)
|
|
(126
|
)
|
|
(176
|
)
|
|
(164
|
)
|
|
(1,871
|
)
|
|
(2,337
|
)
|
|
|||||||||||
GAAP net income (loss) attributable to Blucora, Inc.
|
$
|
(38,884
|
)
|
|
$
|
22,667
|
|
|
$
|
(14,445
|
)
|
|
$
|
(54,119
|
)
|
|
$
|
(19,261
|
)
|
|
$
|
(65,158
|
)
|
|
$
|
30,584
|
|
|
$
|
3,304
|
|
|
$
|
(16,897
|
)
|
|
$
|
10,048
|
|
|
$
|
27,039
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Non-GAAP net income (loss)
|
$
|
36,950
|
|
|
$
|
39,286
|
|
|
$
|
23,424
|
|
|
$
|
(10,142
|
)
|
|
$
|
(7,472
|
)
|
|
$
|
45,096
|
|
|
$
|
47,407
|
|
|
$
|
32,947
|
|
|
$
|
(5,534
|
)
|
|
$
|
(5,672
|
)
|
|
$
|
69,148
|
|
|
Non-GAAP net income (loss) per share - diluted
|
$
|
0.88
|
|
(11)
|
$
|
0.94
|
|
|
$
|
0.55
|
|
|
$
|
(0.24
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
1.06
|
|
(12)
|
$
|
1.04
|
|
|
$
|
0.70
|
|
|
$
|
(0.12
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
1.46
|
|
(13)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Outstanding Shares
|
40,954
|
|
|
41,245
|
|
|
41,495
|
|
|
41,711
|
|
|
41,845
|
|
|
41,845
|
|
|
42,635
|
|
|
44,681
|
|
|
46,077
|
|
|
46,366
|
|
|
46,366
|
|
|
|||||||||||
Basic Shares - GAAP
|
40,959
|
|
|
41,171
|
|
|
41,405
|
|
|
41,635
|
|
|
41,766
|
|
|
41,494
|
|
|
42,145
|
|
|
43,644
|
|
|
45,459
|
|
|
46,231
|
|
|
44,370
|
|
|
|||||||||||
Diluted Shares - GAAP
|
40,959
|
|
|
41,610
|
|
|
42,298
|
|
|
41,635
|
|
|
41,766
|
|
|
41,494
|
|
|
45,428
|
|
|
46,937
|
|
|
45,459
|
|
|
48,406
|
|
|
47,211
|
|
|
(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 a highly seasonal business, almost all of the Tax Preparation revenue is generated in the first four months of the calendar year.
|
(3)
|
We do not allocate certain general and administrative costs (including personnel and overhead costs), stock-based compensation, acquisition-related costs, depreciation, amortization of acquired intangible assets, restructuring, other income/loss, or income taxes to the reportable segments. The general and administrative costs are included in "Unallocated corporate operating expenses." In addition, "Unallocated corporate operating expenses" for the pro forma quarterly and fiscal year 2015 results 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 TaxAct - HD Vest 2015 credit facility that was used to finance the HD Vest acquisition.
|
(6)
|
1Q16 gain on debt extinguishment and modification expense related to the repurchase of a portion of the Convertible Senior Notes below par value, offset by a loss on debt extinguishment and modification expense related to the prepayment of a portion of the TaxAct - HD Vest 2015 credit facility, which resulted in the write-down of a portion of the unamortized discount and debt issuance costs. 2Q16, 3Q16 and 4Q16 loss on debt extinguishment and modification expense related to the prepayment of a portion of the TaxAct - HD Vest 2015 credit facility during each of those quarters.
|
(7)
|
Pro forma 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. On December 22, 2017, the Tax Cuts and Job Act was signed into law. This law, effective January 1, 2018, lowered the corporate income tax rate from 35% to 21%. As a result of that reduction we re-valued our net deferred tax liabilities in 2017, which resulted in an additional income tax benefit of $21.4 million. During 2017 we recorded an income tax benefit of $25.9 million.
|
(8)
|
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 U.S. federal net operating losses. The majority of these net operating losses will expire, if unutilized, between
2020
and
2024
.
|
(9)
|
GAAP income (loss) from continuing operations excludes the impact of noncontrolling interests associated with the HD Vest management rollover equity ownership of 4.48%. The impact of noncontrolling interests is recorded separately and after GAAP income (loss) from continuing operations.
|
(10)
|
On October 14, 2015, Blucora 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. On
August 9, 2016
, we closed on an agreement with
OpenMail
, under which
OpenMail
acquired substantially all of the assets and assumed certain specified liabilities of the Search and Content business for
$45.2 million
. On
November 17, 2016
, we closed on an agreement with
YFC
, under which
YFC
acquired the E-Commerce business for
$40.5 million
. As a result, we recognized a combined loss on sale of discontinued operations before income taxes of
$73.8 million
in FY 2016.
|
(11)
|
Calculation in FY 2015 used
40,959,000
diluted shares due to non-GAAP net income.
|
(12)
|
Calculation in FY 2016 used
42,686,000
diluted shares due to non-GAAP net income.
|
(13)
|
Calculation in FY 2017 used
47,211,000
diluted shares due to non-GAAP net income.
|
(in thousands except per share amounts, rounding differences may exist)
|
2015
|
|
2016
|
|
2017
|
||||||||||||||||||||||||||||||||||||||
FY 12/31
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
FY 12/31
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
FY 12/31
|
|||||||||||||||||||||||
|
pro forma
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
||||||||||||||||||||||
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Net income (loss) attributable to Blucora, Inc.
|
$
|
(38,884
|
)
|
|
$
|
22,667
|
|
|
$
|
(14,445
|
)
|
|
$
|
(54,119
|
)
|
|
$
|
(19,261
|
)
|
|
$
|
(65,158
|
)
|
|
$
|
30,584
|
|
|
$
|
3,304
|
|
|
$
|
(16,897
|
)
|
|
$
|
10,048
|
|
|
$
|
27,039
|
|
Stock-based compensation
|
13,591
|
|
|
4,229
|
|
|
3,023
|
|
|
3,364
|
|
|
3,512
|
|
|
14,128
|
|
|
2,565
|
|
|
2,737
|
|
|
3,132
|
|
|
3,219
|
|
|
11,653
|
|
|||||||||||
Depreciation and amortization of acquired intangible assets
|
45,464
|
|
|
10,105
|
|
|
9,492
|
|
|
9,483
|
|
|
9,608
|
|
|
38,688
|
|
|
9,470
|
|
|
9,395
|
|
|
9,688
|
|
|
9,586
|
|
|
38,139
|
|
|||||||||||
Restructuring
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,870
|
|
|
3,870
|
|
|
2,289
|
|
|
331
|
|
|
106
|
|
|
375
|
|
|
3,101
|
|
|||||||||||
Other loss, net
(4)
|
41,934
|
|
|
7,514
|
|
|
10,916
|
|
|
11,453
|
|
|
9,898
|
|
|
39,781
|
|
|
9,708
|
|
|
24,200
|
|
|
5,241
|
|
|
5,402
|
|
|
44,551
|
|
|||||||||||
Net income attributable to noncontrolling interests
|
—
|
|
|
144
|
|
|
115
|
|
|
167
|
|
|
232
|
|
|
658
|
|
|
126
|
|
|
176
|
|
|
164
|
|
|
1,871
|
|
|
2,337
|
|
|||||||||||
Income tax benefit
|
(7,222
|
)
|
|
11,643
|
|
|
5,793
|
|
|
(8,537
|
)
|
|
(10,184
|
)
|
|
(1,285
|
)
|
|
3,471
|
|
|
2,315
|
|
|
166
|
|
|
(31,842
|
)
|
|
(25,890
|
)
|
|||||||||||
Discontinued operations, net of tax
|
27,348
|
|
|
(2,522
|
)
|
|
19,975
|
|
|
40,528
|
|
|
5,140
|
|
|
63,121
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Acquisition-related costs
|
—
|
|
|
—
|
|
|
391
|
|
|
—
|
|
|
—
|
|
|
391
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Adjusted EBITDA
|
$
|
82,231
|
|
|
$
|
53,780
|
|
|
$
|
35,260
|
|
|
$
|
2,339
|
|
|
$
|
2,815
|
|
|
$
|
94,194
|
|
|
$
|
58,213
|
|
|
$
|
42,458
|
|
|
$
|
1,600
|
|
|
$
|
(1,341
|
)
|
|
$
|
100,930
|
|
Non-GAAP Net Income (Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Net income (loss) attributable to Blucora, Inc.
|
$
|
(38,884
|
)
|
|
$
|
22,667
|
|
|
$
|
(14,445
|
)
|
|
$
|
(54,119
|
)
|
|
$
|
(19,261
|
)
|
|
$
|
(65,158
|
)
|
|
$
|
30,584
|
|
|
$
|
3,304
|
|
|
$
|
(16,897
|
)
|
|
$
|
10,048
|
|
|
$
|
27,039
|
|
Discontinued operations, net of income taxes
|
27,348
|
|
|
(2,522
|
)
|
|
19,975
|
|
|
40,528
|
|
|
5,140
|
|
|
63,121
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Stock-based compensation
|
13,591
|
|
|
4,229
|
|
|
3,023
|
|
|
3,364
|
|
|
3,512
|
|
|
14,128
|
|
|
2,565
|
|
|
2,737
|
|
|
3,132
|
|
|
3,219
|
|
|
11,653
|
|
|||||||||||
Amortization of acquired intangible assets
|
40,851
|
|
|
8,983
|
|
|
8,365
|
|
|
8,346
|
|
|
8,449
|
|
|
34,143
|
|
|
8,336
|
|
|
8,336
|
|
|
8,665
|
|
|
8,665
|
|
|
34,002
|
|
|||||||||||
Accretion of debt discount on Convertible Senior Notes
|
3,866
|
|
|
963
|
|
|
885
|
|
|
901
|
|
|
917
|
|
|
3,666
|
|
|
934
|
|
|
633
|
|
|
—
|
|
|
—
|
|
|
1,567
|
|
|||||||||||
Accelerated accretion of debt discount on Convertible Senior Notes repurchased
|
—
|
|
|
1,628
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,628
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Gain on Convertible Senior Notes repurchased
|
—
|
|
|
(7,724
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,724
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Write-off of debt discount and debt issuance costs on terminated Convertible Senior Notes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,715
|
|
|
—
|
|
|
—
|
|
|
6,715
|
|
|||||||||||
Write-off of debt discount and debt issuance costs on closed TaxAct - HD Vest 2015 credit facility
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,593
|
|
|
—
|
|
|
—
|
|
|
9,593
|
|
|||||||||||
Acquisition-related costs
|
—
|
|
|
—
|
|
|
391
|
|
|
—
|
|
|
—
|
|
|
391
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Restructuring
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,870
|
|
|
3,870
|
|
|
2,289
|
|
|
331
|
|
|
106
|
|
|
375
|
|
|
3,101
|
|
|||||||||||
Impact of noncontrolling interests
|
—
|
|
|
144
|
|
|
115
|
|
|
167
|
|
|
232
|
|
|
658
|
|
|
126
|
|
|
176
|
|
|
164
|
|
|
1,871
|
|
|
2,337
|
|
|||||||||||
Cash tax impact of adjustments to GAAP net income
|
(400
|
)
|
|
339
|
|
|
(78
|
)
|
|
(17
|
)
|
|
(69
|
)
|
|
175
|
|
|
(587
|
)
|
|
(1,819
|
)
|
|
(928
|
)
|
|
3,328
|
|
|
(6
|
)
|
|||||||||||
Non-cash income tax (benefit) expense
|
(9,422
|
)
|
|
10,579
|
|
|
5,193
|
|
|
(9,312
|
)
|
|
(10,262
|
)
|
|
(3,802
|
)
|
|
3,160
|
|
|
2,941
|
|
|
224
|
|
|
(33,178
|
)
|
|
(26,853
|
)
|
|||||||||||
Non-GAAP net income (loss)
|
$
|
36,950
|
|
|
$
|
39,286
|
|
|
$
|
23,424
|
|
|
$
|
(10,142
|
)
|
|
$
|
(7,472
|
)
|
|
$
|
45,096
|
|
|
$
|
47,407
|
|
|
$
|
32,947
|
|
|
$
|
(5,534
|
)
|
|
$
|
(5,672
|
)
|
|
$
|
69,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Non-GAAP net income (loss) per share
|
$
|
0.88
|
|
|
$
|
0.94
|
|
|
$
|
0.55
|
|
|
$
|
(0.24
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
1.06
|
|
|
$
|
1.04
|
|
|
$
|
0.70
|
|
|
$
|
(0.12
|
)
|
|
$
|
(0.12
|
)
|
|
$
|
1.46
|
|
Diluted shares
|
41,861
|
|
|
41,610
|
|
|
42,298
|
|
|
41,635
|
|
|
41,766
|
|
|
42,686
|
|
|
45,428
|
|
|
46,937
|
|
|
45,459
|
|
|
46,231
|
|
|
47,211
|
|
(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.
|
|
2016
|
|
2017
|
|
||||||||||||||||||||
(in thousands except ratio, rounding differences may exist)
|
FY 12/31
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
FY 12/31
|
|
||||||||||||
CASH:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
51,713
|
|
|
$
|
74,609
|
|
|
$
|
78,312
|
|
|
$
|
78,558
|
|
|
$
|
59,965
|
|
|
$
|
59,965
|
|
|
Available-for-sale investments
|
7,101
|
|
|
160
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
|
$
|
58,814
|
|
|
$
|
74,769
|
|
|
$
|
78,312
|
|
|
$
|
78,558
|
|
|
$
|
59,965
|
|
|
$
|
59,965
|
|
|
DEBT:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Senior secured credit facility
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
360,000
|
|
|
$
|
350,000
|
|
|
$
|
345,000
|
|
|
$
|
345,000
|
|
|
TaxAct - HD Vest 2015 credit facility
|
260,000
|
|
|
222,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
Convertible Senior Notes
|
172,859
|
|
|
172,859
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
Note payable, related party
|
3,200
|
|
|
3,200
|
|
|
3,200
|
|
|
3,200
|
|
|
—
|
|
|
—
|
|
|
||||||
|
$
|
436,059
|
|
|
$
|
398,059
|
|
|
$
|
363,200
|
|
|
$
|
353,200
|
|
|
$
|
345,000
|
|
|
$
|
345,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
NET DEBT FROM CONTINUING OPERATIONS
|
$
|
(377,245
|
)
|
|
$
|
(323,290
|
)
|
|
$
|
(284,888
|
)
|
|
$
|
(274,642
|
)
|
|
$
|
(285,035
|
)
|
|
$
|
(285,035
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
OTHER:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Add: Escrow receivable
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
TOTAL NET DEBT FROM CONTINUING OPERATIONS
|
$
|
(377,245
|
)
|
|
$
|
(323,290
|
)
|
|
$
|
(284,888
|
)
|
|
$
|
(274,642
|
)
|
|
$
|
(285,035
|
)
|
|
$
|
(285,035
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Last twelve months (pro forma):
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
SEGMENT INCOME:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Wealth Management
|
$
|
46,296
|
|
|
$
|
47,243
|
|
|
$
|
49,725
|
|
|
$
|
50,522
|
|
|
$
|
50,916
|
|
|
$
|
50,916
|
|
|
Tax Preparation
|
66,897
|
|
|
72,457
|
|
|
79,176
|
|
|
77,320
|
|
|
72,921
|
|
|
72,921
|
|
|
||||||
|
113,193
|
|
|
119,700
|
|
|
128,901
|
|
|
127,842
|
|
|
123,837
|
|
|
123,837
|
|
|
||||||
Unallocated corporate operating expenses
|
(18,999
|
)
|
|
(21,073
|
)
|
|
(23,076
|
)
|
|
(22,756
|
)
|
|
(22,907
|
)
|
|
(22,907
|
)
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
ADJUSTED EBITDA
|
$
|
94,194
|
|
|
$
|
98,627
|
|
|
$
|
105,825
|
|
|
$
|
105,086
|
|
|
$
|
100,930
|
|
|
$
|
100,930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
LEVERAGE RATIO
|
4.0
|
|
x
|
3.3
|
|
x
|
2.7
|
|
x
|
2.6
|
|
x
|
2.8
|
|
x
|
2.8
|
|
x
|
(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 was returned to the Company from escrow in 1Q16.
|
(2)
|
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.
|
|
2016
|
|
2017
|
||||||||||||||||||||
(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
|
$
|
85,970
|
|
|
$
|
52,900
|
|
|
$
|
28,236
|
|
|
$
|
(1,906
|
)
|
|
$
|
(6,384
|
)
|
|
$
|
72,846
|
|
Purchases of property and equipment
|
(3,812
|
)
|
|
(1,165
|
)
|
|
(746
|
)
|
|
(1,898
|
)
|
|
(1,230
|
)
|
|
(5,039
|
)
|
||||||
Operating free cash flow from continuing operations
|
$
|
82,158
|
|
|
$
|
51,735
|
|
|
$
|
27,490
|
|
|
$
|
(3,804
|
)
|
|
$
|
(7,614
|
)
|
|
$
|
67,807
|
|
(1)
|
We define operating free cash flow from continuing operations as
net cash provided by operating activities from continuing operations
less purchases of property and equipment. We believe operating free cash flow is an important liquidity measure that reflects the cash generated by the continuing businesses, after the purchases of property and equipment, that can then be used for, among other things, strategic acquisitions and investments in the businesses, stock repurchases, and funding ongoing operations.
|
|
2015
|
|
2016
|
|
2017
|
||||||||||||||||||||||||||||||||||||||
(in thousands except %s, rounding differences may exist)
|
FY 12/31
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
FY 12/31
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
FY 12/31
|
||||||||||||||||||||||
|
pro forma
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
||||||||||||||||||||||
Segment revenue
|
$
|
319,739
|
|
|
$
|
77,291
|
|
|
$
|
76,117
|
|
|
$
|
80,088
|
|
|
$
|
83,050
|
|
|
$
|
316,546
|
|
|
$
|
82,667
|
|
|
$
|
85,296
|
|
|
$
|
86,809
|
|
|
$
|
93,848
|
|
|
$
|
348,620
|
|
Segment net revenue
(1)
|
$
|
99,749
|
|
|
$
|
25,022
|
|
|
$
|
25,094
|
|
|
$
|
25,167
|
|
|
$
|
27,267
|
|
|
$
|
102,550
|
|
|
$
|
26,793
|
|
|
$
|
28,394
|
|
|
$
|
27,591
|
|
|
$
|
30,639
|
|
|
$
|
113,417
|
|
Segment income
(2)
|
$
|
42,997
|
|
|
$
|
10,906
|
|
|
$
|
9,924
|
|
|
$
|
11,628
|
|
|
$
|
13,838
|
|
|
$
|
46,296
|
|
|
$
|
11,853
|
|
|
$
|
12,406
|
|
|
$
|
12,425
|
|
|
$
|
14,232
|
|
|
$
|
50,916
|
|
Segment income % of revenue
|
13
|
%
|
|
14
|
%
|
|
13
|
%
|
|
15
|
%
|
|
17
|
%
|
|
15
|
%
|
|
14
|
%
|
|
15
|
%
|
|
14
|
%
|
|
15
|
%
|
|
15
|
%
|
|||||||||||
Segment income % of net revenue
|
43
|
%
|
|
44
|
%
|
|
40
|
%
|
|
46
|
%
|
|
51
|
%
|
|
45
|
%
|
|
44
|
%
|
|
44
|
%
|
|
45
|
%
|
|
46
|
%
|
|
45
|
%
|
(in thousands except %s, rounding differences may exist)
|
2015
|
|
2016
|
|
2017
|
||||||||||||||||||||||||||||||||||||||||
|
Sources of Revenue
|
Primary Drivers
|
FY 12/31
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
FY 12/31
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
FY 12/31
|
||||||||||||||||||||||
|
|
|
pro forma
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
||||||||||||||||||||||
Adviser-driven
|
Commission
|
- Transactions
- Asset levels
|
$
|
156,943
|
|
|
$
|
36,856
|
|
|
$
|
35,252
|
|
|
$
|
38,962
|
|
|
$
|
39,055
|
|
|
$
|
150,125
|
|
|
$
|
39,595
|
|
|
$
|
38,154
|
|
|
$
|
39,432
|
|
|
$
|
43,060
|
|
|
$
|
160,241
|
|
Advisory
|
- Advisory asset levels
|
129,433
|
|
|
31,532
|
|
|
31,522
|
|
|
32,705
|
|
|
33,658
|
|
|
129,417
|
|
|
33,576
|
|
|
35,914
|
|
|
37,588
|
|
|
38,616
|
|
|
145,694
|
|
||||||||||||
Other revenue
|
Asset-based
|
- Cash balances
- Interest rates - Number of accounts - Client asset levels |
18,871
|
|
|
5,818
|
|
|
5,395
|
|
|
5,476
|
|
|
5,964
|
|
|
22,653
|
|
|
5,966
|
|
|
6,784
|
|
|
6,526
|
|
|
7,021
|
|
|
26,297
|
|
|||||||||||
Transaction and fee
|
- Account activity
- Number of clients
- Number of advisers
- Number of accounts
|
14,492
|
|
|
3,085
|
|
|
3,948
|
|
|
2,945
|
|
|
4,373
|
|
|
14,351
|
|
|
3,530
|
|
|
4,444
|
|
|
3,263
|
|
|
5,151
|
|
|
16,388
|
|
||||||||||||
|
Total revenue
|
$
|
319,739
|
|
|
$
|
77,291
|
|
|
$
|
76,117
|
|
|
$
|
80,088
|
|
|
$
|
83,050
|
|
|
$
|
316,546
|
|
|
$
|
82,667
|
|
|
$
|
85,296
|
|
|
$
|
86,809
|
|
|
$
|
93,848
|
|
|
$
|
348,620
|
|
|
|
Total recurring revenue
(3)
|
$
|
247,993
|
|
|
$
|
60,069
|
|
|
$
|
61,160
|
|
|
$
|
62,543
|
|
|
$
|
65,358
|
|
|
$
|
249,130
|
|
|
$
|
63,907
|
|
|
$
|
68,971
|
|
|
$
|
70,539
|
|
|
$
|
74,129
|
|
|
$
|
277,546
|
|
|
|
Recurring revenue rate
(3)
|
77.6
|
%
|
|
77.7
|
%
|
|
80.3
|
%
|
|
78.1
|
%
|
|
78.7
|
%
|
|
78.7
|
%
|
|
77.3
|
%
|
|
80.9
|
%
|
|
81.3
|
%
|
|
79.0
|
%
|
|
79.6
|
%
|
(in thousands except %s and as otherwise indicated, rounding differences may exist)
|
2015
|
|
2016
|
|
2017
|
||||||||||||||||||||||||||||||||||||||
FY 12/31
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
FY 12/31
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
FY 12/31
|
|||||||||||||||||||||||
|
pro forma
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
|
as reported
|
||||||||||||||||||||||
Total Assets Under Administration (“AUA”)
|
$
|
36,573,766
|
|
|
$
|
36,505,384
|
|
|
$
|
37,233,522
|
|
|
$
|
38,482,620
|
|
|
$
|
38,663,595
|
|
|
$
|
38,663,595
|
|
|
$
|
40,424,515
|
|
|
$
|
41,427,028
|
|
|
$
|
42,696,862
|
|
|
$
|
44,178,710
|
|
|
$
|
44,178,710
|
|
Advisory Assets Under Management (“AUM”)
|
$
|
9,692,244
|
|
|
$
|
9,592,025
|
|
|
$
|
9,814,232
|
|
|
$
|
10,204,448
|
|
|
$
|
10,397,071
|
|
|
$
|
10,397,071
|
|
|
$
|
11,090,767
|
|
|
$
|
11,551,288
|
|
|
$
|
11,984,320
|
|
|
$
|
12,530,165
|
|
|
$
|
12,530,165
|
|
% of total AUA
|
26.5
|
%
|
|
26.3
|
%
|
|
26.4
|
%
|
|
26.5
|
%
|
|
26.9
|
%
|
|
26.9
|
%
|
|
27.4
|
%
|
|
27.9
|
%
|
|
28.1
|
%
|
|
28.4
|
%
|
|
28.4
|
%
|
|||||||||||
Number of Advisers (in ones)
|
4,600
|
|
|
4,584
|
|
|
4,561
|
|
|
4,568
|
|
|
4,472
|
|
|
4,472
|
|
|
4,427
|
|
|
4,426
|
|
|
4,392
|
|
|
3,999
|
|
|
3,999
|
|
|||||||||||
Adviser-driven revenue per adviser
|
$
|
15.9
|
|
|
$
|
14.9
|
|
|
$
|
14.6
|
|
|
$
|
15.7
|
|
|
$
|
16.3
|
|
|
$
|
16.3
|
|
|
$
|
16.5
|
|
|
$
|
16.7
|
|
|
$
|
17.5
|
|
|
$
|
20.4
|
|
|
$
|
20.4
|
|
(1)
|
Amount represents segment revenue less adviser commission payout.
|
(2)
|
Excludes expenses associated with non-recurring projects.
|
(3)
|
Recurring revenue consists of trailing commissions, advisory fees, fees from cash sweep programs, and certain transaction and fee revenue.
|
(in thousands except %s, rounding differences may exist)
|
U.S. tax seasons ended
|
|
Years ended December 31,
|
||||||||||||||
Consumers
|
April 18, 2017
|
|
April 19, 2016
|
|
% change
|
|
2017
|
|
2016
|
|
% change
|
||||||
Online e-files
|
3,958
|
|
|
4,613
|
|
|
(14
|
)%
|
|
4,097
|
|
|
4,759
|
|
|
(14
|
)%
|
Desktop e-files
|
184
|
|
|
234
|
|
|
(21
|
)%
|
|
193
|
|
|
244
|
|
|
(21
|
)%
|
Sub-total e-files
|
4,142
|
|
|
4,847
|
|
|
(15
|
)%
|
|
4,290
|
|
|
5,003
|
|
|
(14
|
)%
|
Free File Alliance e-files
(1)
|
164
|
|
|
158
|
|
|
4
|
%
|
|
176
|
|
|
167
|
|
|
5
|
%
|
Total e-files
|
4,306
|
|
|
5,005
|
|
|
(14
|
)%
|
|
4,466
|
|
|
5,170
|
|
|
(14
|
)%
|
(in thousands except %s and as otherwise indicated, rounding differences may exist)
|
U.S. tax seasons ended
|
|
Years ended December 31,
|
||||||||||||||
Preparers
|
April 18, 2017
|
|
April 19, 2016
|
|
% change
|
|
2017
|
|
2016
|
|
% change
|
||||||
E-files
|
1,717
|
|
|
1,630
|
|
|
5
|
%
|
|
1,774
|
|
|
1,755
|
|
|
1
|
%
|
Units sold (in ones)
|
20,964
|
|
|
20,114
|
|
|
4
|
%
|
|
20,694
|
|
|
20,290
|
|
|
2
|
%
|
E-files per unit sold (in ones)
|
81.9
|
|
|
81.0
|
|
|
1
|
%
|
|
85.7
|
|
|
86.5
|
|
|
(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.
|