Blucora Announces Fourth Quarter and Full Year 2012 Results
Blucora Announces Fourth Quarter and Full Year 2012 Results
2012 Adjusted EBITDA Up 120 Percent on TaxACT Acquisition and Strong Search Performance
BELLEVUE, Wash.--(BUSINESS WIRE)-- Blucora, Inc. (NAS: BCOR) today announced financial results for the fourth quarter and full year ended December 31, 2012.
"The success of online search and tax preparation led Blucora to strong results for fiscal year 2012," said Bill Ruckelshaus, President and Chief Executive Officer of Blucora. "We are pleased with our performance in both businesses in the fourth quarter and full year 2012. TaxACT entered the current tax season with momentum, driven by core product enhancements, content support improvements, and marketing programs aimed at increasing consumer awareness."
Highlights
Fourth quarter revenue and Adjusted EBITDA grew 46% and 19% respectively, over the prior year
Full year revenue and Adjusted EBITDA grew 78% and 120% respectively, year over year
Full year search segment income grew 35% over the prior year
Blucora Board of Directors approved a $50 million share repurchase program
Summary Financial Performance: 4Q and Full Year 2012 ($ in millions except per share amounts) | ||||||||||||||||||||
Q4 2012 | Q4 2011 | Growth | FY 2012 | FY 2011 | Growth | |||||||||||||||
Revenue | $ | 97.5 | $ | 66.6 | 46 | % | $ | 406.9 | $ | 228.8 | 78 | % | ||||||||
Search | $ | 96.3 | $ | 66.6 | 45 | % | $ | 344.8 | $ | 228.8 | 51 | % | ||||||||
Tax Preparation | $ | 1.2 | N/A | N/A | $ | 62.1 | N/A | N/A | ||||||||||||
Adjusted EBITDA | $ | 12.1 | $ | 10.2 | 19 | % | $ | 80.4 | $ | 36.6 | 120 | % | ||||||||
Non-GAAP Net Income | $ | 10.0 | $ | 6.9 | 45 | % | $ | 70.8 | $ | 28.8 | 146 | % | ||||||||
Non-GAAP Diluted EPS | $ | 0.24 | $ | 0.17 | 41 | % | $ | 1.70 | $ | 0.74 | 130 | % | ||||||||
Net Income | $ | 3.8 | $ | 22.9 | (2) | -83 | % | $ | 22.5 | $ | 21.6 | (2) | 4 | % | ||||||
GAAP Diluted Income Per Share | $ | 0.04 | (1) | $ | 0.57 | (2) | -92 | % | $ | 0.54 | $ | 0.56 | (2) | -4 | % | |||||
(1) Excludes a $1.9 million non-cash gain on derivative instrument (2) Includes a $18.9 million income tax benefit due to the reversal of the valuation allowance on deferred tax assets See reconciliation of non-GAAP to GAAP measures below. | ||||||||||||||||||||
Segment Information
Search
Search revenue for the fourth quarter and full year 2012 reflects strong growth from search distribution, up 52 percent and 67 percent over the fourth quarter and full year 2011, respectively. Search segment income for the fourth quarter and full year 2012 was $17.4 million and $62.2 million, up 36 percent and 35 percent over the fourth quarter and full year 2011, respectively.
Tax Preparation
Tax preparation segment loss for the fourth quarter of 2012 was $2.5 million. Tax preparation typically posts a seasonal loss in the fourth quarter when there is little revenue from its tax business. Tax preparation segment income for the full year 2012 was $30.1 million. This figure excludes TaxACT operating results before January 31, 2012 as the Company acquired TaxACT on that date.
Corporate Operating Expenses
Unallocated corporate operating expenses for the fourth quarter and full year 2012 were $2.8 million and $11.8 million, up 6 percent and 23 percent over the fourth quarter and full year 2011, respectively.
Share Repurchase Program
The Company's board of directors has approved a share repurchase program of up to $50 million of the Company's outstanding shares of common stock. Under the program, shares may be repurchased from time to time in the open market for a two-year period.
First Quarter Outlook
For the first quarter of 2013, the Company expects revenues to be between $156.0 million and $161.0 million, Adjusted EBITDA to be between $43.0 million and $45.0 million, Non-GAAP Net Income to be between $39.5 million and $41.5 million, or $0.93 to $0.97 per diluted share, and Net Income to be between $20.5 and $22.0 million, or $0.48 to $0.52 per diluted share. The Company's forward-looking guidance does not reflect potential gains or losses from derivative instruments.
Conference Call and Webcast
A conference call and live webcast will be held today at 2 p.m. Pacific time / 5 p.m. Eastern time during which the Company will further discuss fourth quarter and full year results and its outlook including tax preparation segment guidance for the first half of 2013, search segment guidance for the first quarter 2013 and search segment expectations for 2013. The supplemental materials are included in a current report on form 8-K filed today and can be accessed in the Investor Relations section of the Blucora corporate website at http://www.blucora.com. A replay of the call will also be available on our website for one year and are may be accessed under the "Events & Presentations" section of the Investor Center. You may also listen to the conference call audio on the Blucora YouTube Channel at www.YouTube.com/Blucora.
About Blucora™
Blucora operates two leading Internet businesses. Our InfoSpace business provides online search and monetization solutions to a network of more than 100 partners globally. Through TaxACT, we provide online tax preparation solutions to consumers and professional preparers. The Blucora team brings decades of experience operating and investing in desktop, online, and mobile businesses. We are passionate about the power of the Internet to improve the lives of consumers, and our businesses operate at the forefront of digital migration trends in their respective markets. More information about Blucora may be found at www.blucora.com. Follow and subscribe to us on Twitter, LinkedIn and YouTube.
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 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, operating plans, and marketing strategies; and the condition of our cash investments, and the completion of the audit of our financial statements for 2012. A more detailed description of these and certain other factors that could affect actual results is included in Blucora, Inc.'s most recent Annual Report on Form 10-K 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(1) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
(Amounts in thousands, except per share data) | |||||||||||||||||
Three months ended | Year ended | ||||||||||||||||
December 31, | December 31, | December 31, | December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||
Revenues | $ | 97,470 | $ | 66,614 | $ | 406,919 | $ | 228,813 | |||||||||
Cost of sales (includes amortization of acquired intangible assets of $1,975, $347, $7,580, and $2,595) (2) | 73,704 | 46,954 | 267,451 | 154,962 | |||||||||||||
Gross profit | 23,766 | 19,660 | 139,468 | 73,851 | |||||||||||||
Expenses and other loss (income): | |||||||||||||||||
Engineering and technology (2) | 2,538 | 1,904 | 9,969 | 7,158 | |||||||||||||
Sales and marketing (2) | 8,085 | 4,753 | 44,138 | 21,510 | |||||||||||||
General and administrative (2) | 5,713 | 4,899 | 27,418 | 21,542 | |||||||||||||
Depreciation | 492 | 473 | 2,119 | 2,162 | |||||||||||||
Amortization of intangible assets | 3,169 | - | 11,619 | - | |||||||||||||
Other loss (income), net (3) | (1,004 | ) | 972 | 6,677 | 1,246 | ||||||||||||
Total expenses and other loss (income) | 18,993 | 13,001 | 101,940 | 53,618 | |||||||||||||
Income from continuing operations before income taxes | 4,773 | 6,659 | 37,528 | 20,233 | |||||||||||||
Income tax benefit (expense) | (953 | ) | 16,215 | (15,002 | ) | 11,288 | |||||||||||
Income from continuing operations | 3,820 | 22,874 | 22,526 | 31,521 | |||||||||||||
Discontinued operations: (1) | |||||||||||||||||
Loss from discontinued operations, net of taxes (2) | - | - | - | (2,253 | ) | ||||||||||||
Loss on sale of discontinued operations, net of taxes | - | - | - | (7,674 | ) | ||||||||||||
Net income | $ | 3,820 | $ | 22,874 | $ | 22,526 | $ | 21,594 | |||||||||
Earnings per share - Basic | |||||||||||||||||
Income from continuing operations | $ | 0.09 | $ | 0.58 | $ | 0.56 | $ | 0.83 | |||||||||
Loss from discontinued operations | - | - | - | (0.06 | ) | ||||||||||||
Loss on sale of discontinued operations | - | - | - | (0.20 | ) | ||||||||||||
Net income per share - Basic | $ | 0.09 | $ | 0.58 | $ | 0.56 | $ | 0.57 | |||||||||
Earnings per share - Diluted | |||||||||||||||||
Income from continuing operations | $ | 0.04 | ((4 | )) | $ | 0.57 | $ | 0.54 | $ | 0.82 | |||||||
Loss from discontinued operations | - | - | - | (0.06 | ) | ||||||||||||
Loss on sale of discontinued operations | - | - | - | (0.20 | ) | ||||||||||||
Net income per share - Diluted | $ | 0.04 | $ | 0.57 | $ | 0.54 | $ | 0.56 | |||||||||
Weighted average shares outstanding used in computing basic income per share | 40,789 | 39,448 | 40,279 | 37,954 | |||||||||||||
Weighted average shares outstanding used in computing diluted income per share | 42,411 | 40,074 | 41,672 | 38,621 | |||||||||||||
(1) In the year ended December 31, 2011, the Company completed the sale of its Mercantila e-commerce business. In the year ended December 31, 2011, the Company recorded a $1.3 million income tax benefit related to discontinued operations. In the year ended December 31, 2011, the Company recorded a loss, net of an income tax benefit of $5.1 million, on the sale of the Mercantila business. Revenue, operating expenses and income taxes, loss from discontinued operations and the loss on sale of these discontinued operations are presented below (in thousands): | |||||||||||||||||
Three months ended | Year ended | ||||||||||||||||
December 31, | December 31, | December 31, | December 31, | ||||||||||||||
E-Commerce | 2012 | 2011 | 2012 | 2011 | |||||||||||||
Revenue | $ | - | $ | - | $ | - | $ | 16,894 | |||||||||
Operating expenses and income taxes | - | - | - | 19,147 | |||||||||||||
Loss from discontinued operations, net of taxes | $ | - | $ | - | $ | - | $ | (2,253 | ) | ||||||||
Loss on sale of discontinued operations, net of taxes | $ | - | $ | - | $ | - | $ | (7,674 | ) | ||||||||
(2) In the year ended December 31, 2012, $5.2 million in stock-based compensation expense was recorded in association with the modification of the terms of a warrant and the vesting of a non-employee performance-based equity award, which were both triggered by the acquisition of the TaxACT business, and the related expense was allocated to general and administrative expense. Stock-based compensation expense for the three months and year ended December 31, 2012 and 2011 is allocated among the following captions (in thousands): | |||||||||||||||||
Three months ended | Year ended | ||||||||||||||||
December 31, | December 31, | December 31, | December 31, | ||||||||||||||
Stock-Based Compensation | 2012 | 2011 | 2012 | 2011 | |||||||||||||
Cost of sales | 227 | $ | 52 | ||||||||||||||
