Blucora Reports Fourth Quarter and Full Year 2015 Results

BELLEVUE, WA--(Marketwired - February 11, 2016) -  Blucora, Inc. (NASDAQ: BCOR) today announced financial results for the fourth quarter and full year ended December 31, 2015.

2015 Highlights and Recent Developments

• Blucora completed the acquisition of HD Vest on December 31, 2015, which reported a 5% increase in revenue and a 7% increase in income for 2015.
• TaxAct posted a 13% increase in revenue and a 15% increase in segment income for 2015, marking the fourth consecutive year of double-digit top and bottom line growth under Blucora's ownership.
• TaxAct introduced a new forms based pricing structure for the current tax season, offering Free State and Federal for simple returns.
• TaxAct recently debuted a robust new set of enhancements to its Preparer's editions and a new client portal.
• HD Vest recruiting at highest levels in more than eight years at the firm and exited the year with 4,600 advisors up 2% and marks the third consecutive year of advisor growth.

"Blucora made transformational changes in 2015," said Bill Ruckelshaus, President and Chief Executive Officer of Blucora. "Our acquisition of HD Vest last year was guided by two principal beliefs. First, the HD Vest market opportunity is compelling, the Company has a differentiated business model, and a proven team. Second, there are meaningful opportunities in bringing HD Vest and TaxAct under common ownership to create a more strategically focused Blucora going forward. With the HD Vest acquisition now complete, our attention is fixed on executing in the current season at TaxAct, integrating HD Vest and laying the groundwork for future cross-collaboration between our two businesses. Our divestiture processes for Monoprice and Infospace are proceeding as planned."

The following presentation represents pro forma financial information and includes 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.

See reconciliation of pro forma non-GAAP to GAAP measures in table below.

First Quarter and Full Year 2016 Outlook

For the first quarter of 2016, the Company expects revenues to be between $162.5 million and $167.0 million, Adjusted EBITDA to be between $49.0 million and $52.0 million, Non-GAAP income from continuing operations to be between $36.7 million and $39.9 million, or $0.88 to $0.96 per diluted share, and GAAP income from continuing operations to be between $14.4 million and $16.6 million, or $0.35 to $0.40 per diluted share.

For the full year 2016, the Company expects revenues to be between $444.0 million and $462.5 million, Adjusted EBITDA to be between $86.0 million and $91.5 million, Non-GAAP income from continuing operations to be between $40.6 million and $47.5 million, or $0.96 to $1.12 per diluted share, and GAAP loss from continuing operations to be between $(7.5) million and $(2.2) million, or $(0.18) to $(0.05) per diluted share.

See reconciliation of non-GAAP to GAAP measures in table below.

Other

For the full year 2015, the Company repurchased 0.6 million shares for approximately $7.7 million. The Company has approximately $28.7 million authorized under the current plan.

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, its outlook for the first quarter and full year of 2016, and other business matters. 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. (NASDAQ: BCOR) 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.

⁽¹⁾ Stock-based compensation expense was allocated among the following captions (in thousands):

⁽³⁾ Loss from discontinued operations included goodwill and trade name impairments, totaling $59.0 million and $62.6 million for the years ended December 31, 2015 and 2014, respectively.

Notes to Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures

1. We define Adjusted EBITDA differently for this report than we have defined it in the past, due to the discontinued operations treatment of our Search and Content and E-Commerce businesses as determined in the fourth quarter of 2015, as well as transaction costs related to the HD Vest acquisition and separation-related costs in connection with the upcoming departure of our chief executive officer both of which were announced in the fourth quarter of 2015. We define Adjusted EBITDA as income (loss) from continuing operations, determined in accordance with the accounting principles generally accepted in the United States of America ("GAAP"), excluding the effects of income taxes, depreciation, amortization of acquired intangible assets (including acquired technology), stock-based compensation, acquisition-related transaction costs, CEO separation- related costs, and other loss, net (as described in note ⁽³⁾ below).
   
   We believe that Adjusted EBITDA provides meaningful supplemental information regarding our performance. We use this non-GAAP financial measure for internal management and compensation purposes, when publicly providing guidance on possible future results, and as a means to evaluate period-to-period comparisons. We believe that Adjusted EBITDA is a common measure used by investors and analysts to evaluate our performance, that it provides a more complete understanding of the results of operations and trends affecting our business when viewed together with GAAP results, and that management and investors benefit from referring to this non-GAAP financial measure. Items excluded from Adjusted EBITDA are significant and necessary components to the operations of our business and, therefore, Adjusted EBITDA should be considered as a supplement to, and not as a substitute for or superior to, GAAP income (loss) from continuing operations. Other companies may calculate Adjusted EBITDA differently and, therefore, our Adjusted EBITDA may not be comparable to similarly titled measures of other companies.
   We define non-GAAP income (loss) from continuing operations differently for this report than we have defined it in the past, due to the discontinued operations treatment of our Search and Content and E-Commerce businesses as determined in the fourth quarter of 2015, as well as transaction costs related to the HD Vest acquisition and separation-related costs in connection with the upcoming departure of our chief executive officer both of which were announced in the fourth quarter of 2015. For this report, we define non-GAAP income (loss) from continuing operations as income (loss) from continuing operations, determined in accordance with GAAP, excluding the effects of stock-based compensation, amortization of acquired intangible assets (including acquired technology), accretion of debt discount on the Convertible Senior Notes, loss on debt extinguishment and modification expense, acquisition-related transaction costs, CEO separation-related costs, the related cash tax impact of those adjustments, and non-cash income taxes. 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.
   
   We believe that non-GAAP income (loss) from continuing operations and non-GAAP income (loss) from continuing operations per share provide meaningful supplemental information to management, investors, and analysts regarding our performance and the valuation of our business by excluding items in the statement of operations that we do not consider part of our ongoing operations or have not been, or are not expected to be, settled in cash. Additionally, we believe that non- GAAP income (loss) from continuing operations and non-GAAP income (loss) from continuing operations per share are common measures used by investors and analysts to evaluate our performance and the valuation of our business. Non-GAAP income (loss) from continuing operations should be evaluated in light of our financial results prepared in accordance with GAAP and should be considered as a supplement to, and not as a substitute for or superior to, GAAP income (loss) from continuing operations. Other companies may calculate non-GAAP income (loss) from continuing operations differently, and, therefore, our non-GAAP income (loss) from continuing operations may not be comparable to similarly titled measures of other companies.
   
2. As presented in the Preliminary Condensed Consolidated Statements of Operations (unaudited).
   
3. Other loss, net primarily includes items such as interest income, interest expense, amortization of debt issuance costs, accretion of debt discounts, loss on debt extinguishment and modification expense, and gain on third party bankruptcy settlement.