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Blucora Announces First Quarter 2016 Adjusted EBITDA up 11 Percent Year Over Year

BELLEVUE, WA, Apr 28, 2016 (Marketwired via COMTEX) -- Blucora, Inc. BCOR, +17.13% a leading provider of technology-enabled financial solutions to consumers, small businesses and tax professionals, today announced financial results for the first quarter ended March 31, 2016 and provided preliminary tax season update.

First Quarter Highlights and Recent Developments

--  Blucora named John S. Clendening as president and chief executive
    officer
--  TaxAct revenue and segment income expected to grow approximately 18
    percent and 20 percent respectively for the six months through June 30,
    2016 compared to the same period last year
--  HD Vest net revenue(1) grew 5 percent and segment income grew 26 percent
    in the first quarter compared to the same period last year
--  Blucora paid down principal of Term B loan by 10 percent ($40M) and
    repurchased $28.4 million of convertible debt



"Our team continues to drive efforts to strengthen Blucora and execute on our strategic transformation into a technology-enabled financial solutions company," said John Clendening, president and chief executive officer of Blucora. "We began 2016 with good momentum punctuated by our strong financial performance during this year's tax season. Looking ahead, we are committed to our 2016 stated objectives of aggressively paying down debt, divesting our non-core businesses, reducing operating expenses, and delivering on our business performance goals. I am thrilled to lead a newly transformed Blucora, excited for what we can achieve together, and confident in our ability to enhance shareholder value."

Eric Emans, chief financial officer and treasurer of Blucora, noted that the Company has made progress toward its commitment to pay down debt. "We retired more than $65 million of debt in the quarter," he explained, "lowering our net leverage ratio and highlighting the Company's growth, predictable profit generation and strong free cash flow conversion. Debt repayment will remain the top priority for our capital allocation strategy throughout this year and into 2017."

The following presentation includes pro forma financial information and HD Vest. In addition, it excludes the Search and Content and E-Commerce segments which have been classified as discontinued operations for all periods presented. The Company believes that this presentation most accurately reflects the financial performance of the Company on a go-forward basis.

                   Summary Financial Performance: Q1 2016
                  ($ in millions except per share amounts)

                                                   Q1          Q1
                                                  2016        2015    Change
                                              ------------  --------- ------
                                               As reported  Pro forma
Revenue                                       $      165.8 $    157.9     5%
  Wealth Management                           $       77.3 $     76.8     1%
  Tax Preparation                             $       88.5 $     81.1     9%
Segment Income
  Wealth Management                           $       10.9 $      8.6    26%
  Tax Preparation                             $       47.6 $     44.1     8%
Unallocated Corporate Operating Expenses      $        4.7 $      4.4     7%
Adjusted EBITDA                               $       53.8 $     48.4    11%
Non-GAAP:
  Net Income                                  $       39.3 $     37.3     5%
  Diluted Net Income Per Share                $       0.94 $     0.89     6%
GAAP:
  Net Income Attributable to Blucora, Inc.    $       22.7 $     18.4    23%
  Diluted Net Income Per Share Attributable
   to Blucora, Inc.                           $       0.54 $     0.44    23%



See reconciliations of as reported and pro forma non-GAAP to GAAP measures in tables below.

(1) Net revenue represents Wealth Management segment revenue less Wealth Management services cost of revenue.

Tax Season Update

(in thousands, except %s)                       Tax seasons ended
                                     ---------------------------------------
                                     April 19, 2016 April 16, 2015 % change
                                     -------------- -------------- ---------
Consumer:
  Online e-files                              4,613          5,058      (9)%
  Desktop e-files                               234            261     (10)%
                                     -------------- --------------
    Sub-total e-files                         4,847          5,319      (9)%
  Free File Alliance e-files                    158            172      (8)%
                                     -------------- --------------
    Total consumer e-files                    5,005          5,491      (9)%
Professional tax preparer:
  E-files                                     1,630          1,475       11%
                                     -------------- --------------
Total e-files (consumer and
 preparer)                                    6,635          6,966      (5)%
                                     ============== ==============



Tax season begins on the first day that the IRS begins accepting e-files and ends on tax day +1.

Other

During the first quarter of 2016, the Company repaid $40.0 million on the TaxAct - HD Vest credit facility and repurchased $28.4 million of the Convertible Senior Notes for cash of $20.7 million. As a result, at the end of the first quarter, Blucora's net leverage ratio was lowered by 1.1x.

Second Quarter and Full Year 2016 Outlook

For the second quarter of 2016, the Company expects revenues to be between $120.5 million and $124.5 million, Adjusted EBITDA to be between $33.7 million and $35.9 million, Non-GAAP income from continuing operations to be between $20.0 million and $22.7 million, or $0.48 to $0.54 per diluted share, and GAAP income from continuing operations to be between $4.5 million and $6.3 million, or $0.11 to $0.15 per diluted share.

For the full year 2016, the Company expects revenues to be between $452.0 million and $465.5 million, Adjusted EBITDA to be between $90.0 million and $94.0 million, Non-GAAP income from continuing operations to be between $39.9 million and $44.4 million, or $0.95 to $1.06 per diluted share, and GAAP loss from continuing operations to be between $5.0 million and $1.3 million, or $(0.12) to $(0.03) per diluted share.

Conference Call and Webcast

A conference call and live webcast will be held today at 5:30 a.m. Pacific Time / 8:30 a.m. Eastern Time during which the Company will further discuss first quarter results and its outlook for the second quarter of 2016. We have also provided supplemental financial information to our results that can be accessed in the Investor Relations section of the Blucora corporate website at http://www.blucora.com and filed with the SEC on Form 8-K. A replay of the call and management's prepared remarks will also be available on our website.

About Blucora®

Blucora, Inc. BCOR, +17.13% is a leading provider of technology-enabled financial solutions to consumers, small businesses and tax professionals. Our products and services in tax preparation and wealth management, through TaxAct and HD Vest, help consumers manage their financial lives. TaxAct is an affordable digital tax preparation solution for individuals, business owners and tax professionals. HD Vest Financial Services® supports an independent network of tax professionals who provide comprehensive financial planning solutions. For more information on Blucora or its businesses, please visit www.blucora.com.

This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results may differ significantly from management's expectations due to various risks and uncertainties including, but not limited to: general economic, industry, and market sector conditions; the availability of products to sell; the timing and extent of market acceptance of developed products and services and related costs; our dependence on companies to distribute our products and services; the ability to successfully integrate acquired businesses; future acquisitions; the successful execution of the Company's strategic initiatives, technology enhancements, operating plans, and marketing strategies; and the condition of our cash investments. A more detailed description of these and certain other factors that could affect actual results is included in Blucora, Inc.'s most recent Quarterly Report on Form 10-Q and subsequent reports filed with or furnished to the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Blucora, Inc. undertakes no obligation to update any forward-looking statements to reflect new information, events, or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

                               Blucora, Inc.
        Preliminary Condensed Consolidated Statements of Operations
                                 (Unaudited)
                (Amounts in thousands, except per share data)

                                                Three months ended March 31,
                                                ----------------------------
                                                     2016           2015
                                                -------------- -------------
Revenue:
  Wealth management services revenue            $       77,291 $           -
  Tax preparation services revenue                      88,474        81,068
                                                -------------- -------------
      Total revenue                                    165,765        81,068
Operating expenses:
  Cost of revenue:
    Wealth management services cost of revenue          52,269             -
    Tax preparation services cost of revenue             3,207         2,137
    Amortization of acquired technology                    667         1,862
                                                -------------- -------------
      Total cost of revenue (1)                         56,143         3,999
  Engineering and technology (1)                         4,295         1,090
  Sales and marketing (1)                               43,837        33,018
  General and administrative (1)                        12,753         7,146
  Depreciation                                             975           351
  Amortization of other acquired intangible
   assets                                                8,316         3,186
                                                -------------- -------------
      Total operating expenses                         126,319        48,790
                                                -------------- -------------
Operating income                                        39,446        32,278
Other loss, net (2)                                    (7,514)       (2,995)
                                                -------------- -------------
Income from continuing operations before income
 taxes                                                  31,932        29,283
Income tax expense                                    (11,643)       (9,868)
                                                -------------- -------------
Income from continuing operations                       20,289        19,415
Discontinued operations, net of income taxes             2,522         3,685
                                                -------------- -------------
Net income                                              22,811        23,100
Net income attributable to noncontrolling
 interests                                               (144)             -
                                                -------------- -------------
Net income attributable to Blucora, Inc.        $       22,667 $      23,100
                                                ============== =============
Net income per share attributable to Blucora,
 Inc. - basic:
  Continuing operations                         $         0.49 $        0.47
  Discontinued operations                                 0.06          0.09
                                                -------------- -------------
  Basic net income per share                    $         0.55 $        0.56
                                                ============== =============
Net income per share attributable to Blucora,
 Inc. - diluted:
  Continuing operations                         $         0.48 $        0.46
  Discontinued operations                                 0.06          0.09
                                                -------------- -------------
  Diluted net income per share  ...

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