IRVING, Texas, May 06, 2020 (GLOBE NEWSWIRE) — Blucora, Inc. (NASDAQ: BCOR), a leading provider of tax-smart financial solutions that empower people to achieve their goals, today announced financial results for the first quarter ended March 31, 2020.
First Quarter Highlights and Recent DevelopmentsIncreased total revenue by 17% year-over-year (y/y), including addition of 1st GlobalStrong cash position through healthy cash flows and access to credit, ending the quarter with $168.2 million in cash and cash equivalentsAchieved $390 million of net flows in to Advisory Assets and $124 million into Total Client AssetsTotal Client Assets ended the quarter at $61.0 billion, with $23.6 billion, or 38.7%, in Advisory AssetsNew leadership additions and organizational realignment to support and accelerate our growth prioritiesRecorded impairment of goodwill of approximately $271 million relating to wealth management business“I’m extremely proud of our leadership team and employees, who have adapted quickly to ensure that we could operate productively and continue to meet the needs of our customers without interruption during the COVID-19 health crisis,” said Chris Walters, Blucora’s President and Chief Executive Officer. “We believe that our first quarter results reflect our wealth management business performing well with business continuity in place despite the COVID-19 outbreak and with results of that business for the first quarter ahead of expectations. That said, the pandemic’s impact on the economy and markets led us to perform a review the goodwill of our business units and record an impairment relating to our wealth management business. With respect to our tax preparation business, the extension of the tax season to July has pushed the tax preparation business’s volume, and associated revenue, into subsequent quarters.”“Overall, we feel fortunate to have two strong businesses with ongoing demand in this challenging environment, and will continue to position the Company to best support our customers, advisors and stockholders today, and over the long-term. As part of this, I was pleased to announce recently that we now have a full leadership team in place and the operational structure that I believe will support and accelerate the execution of our priorities.”Summary Financial Performance: Q1 2020
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(1) Included an impairment of goodwill of $270.6 million related to the Wealth Management business.
(2) See reconciliations of all non-GAAP to GAAP measures presented in this release in the tables below.
Outlook
The increased level of uncertainty around the near and longer-term impact of COVID-19, as well as the extension of the tax season into the 3rd quarter with a July 15 deadline, has delayed filing volume and makes it difficult to accurately predict the timing, volume and revenue of remaining tax-year 2019 filings. Due to these factors, and to maintain flexibility in an uncertain environment, the Company is withdrawing its prior first half 2020 tax preparation outlook and not providing additional outlook guidance at this time.Conference Call and WebcastA conference call and live webcast will be held today at 8:30 a.m. Eastern Time during which the Company will further discuss the first quarter, its outlook for full year 2020, its tax season update, and other business matters. We will also provide the prepared remarks for the conference call along with supplemental financial information to our results on the Investor Relations section of the Blucora corporate website at www.blucora.com prior to the call. The supplemental financial information has also been filed with the SEC on Form 8-K. A replay of the call will be available on our website.About Blucora®Blucora, Inc. (NASDAQ: BCOR) is on the forefront of financial technology, pioneering tax-smart financial solutions that empower people’s goals. Blucora operates in two segments including (i) wealth management, through its Avantax Wealth Management business (formerly operating under the HD Vest and 1st Global brands), the leading tax-focused broker-dealer, with $61 billion in total client assets as of March 31, 2020, and (ii) tax preparation, through its TaxAct business, a market leader in tax preparation software with approximately 3 million consumer and professional users in 2019. With integrated tax and wealth management, Blucora is uniquely positioned to assist our customers in achieving better long-term outcomes via holistic, tax-advantaged solutions. For more information on Blucora, visit www.blucora.com.Source: BlucoraBlucora Contact:
Bill Michalek (972) 870-6463
VP, Investor RelationsThis release 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. When used in this release, terms such as “believes,” “estimates,” “should,” “could,” “would,” “plans,” “expects,” “intends,” “anticipates,” “may,” “forecasts,” “projects” and similar expressions and variations as they relate to the Company or its management are intended to identify forward-looking statements. Actual results may differ significantly from management’s expectations due to various risks and uncertainties including, but not limited to: the impact of the recent coronavirus outbreak on our results of operations and our business, including the impact of the resulting economic downturn and the extension of tax filing deadlines and other related relief; our ability to effectively implement our future business plans and growth strategy; our ability to effectively compete within our industry; our ability to attract and retain financial advisors, qualified employees, clients, and customers, as well as our ability to provide strong customer/client service; our ability to close, finance, and realize all of the anticipated benefits of our recent or pending acquisitions, as well as our ability to integrate the operations of recently acquired businesses, and the potential impact of such acquisitions on our existing indebtedness and leverage; our future capital requirements and the availability of financing, if necessary; our ability to meet our current and future debt service obligations, including our ability to maintain compliance with our debt covenants; downgrade of the Company’s credit ratings; our ability to generate strong investment performance for our clients and the impact of the financial markets on our clients’ portfolios; the impact of new or changing legislation and regulations (or interpretations thereof) on our business, including our ability to successfully address and comply with such legislation and regulations (or interpretations thereof) and increased costs, reductions of revenue, and potential fines, penalties or disgorgement to which we may be subject as a result thereof; risks, burdens, and costs, including fines, penalties or disgorgement, associated with our business being subjected to regulatory inquiries, investigations or initiatives; risks associated with legal proceedings, including litigation and regulatory proceedings; our ability to manage leadership and employee transitions, including costs and time burdens on management and our board of directors related thereto; political and economic conditions and events that directly or indirectly impact the wealth management and tax preparation industries; our ability to respond to rapid technological changes, including our ability to successfully release new products and services or improve upon existing products and services; the compromising of confidentiality, availability or integrity of information, including cyberattacks; our expectations concerning the revenues we generate from fees associated with the financial products that we distribute; risks related to goodwill and other intangible asset impairment; our ability to develop, establish, and maintain strong brands; risks associated with the use and implementation of information technology and the effect of security breaches, computer viruses, and computer hacking attacks; our ability to comply with laws and regulations regarding privacy and protection of user data; our ability to maintain our relationships with third-party partners, providers, suppliers, vendors, distributors, contractors, financial institutions, industry associations, and licensing partners, and our expectations regarding and reliance on the products, tools, platforms, systems, and services provided by these third parties; our beliefs and expectations regarding the seasonality of our business; our assessments and estimates that determine our effective tax rate; and our ability to protect our intellectual property and the impact of any claim that we have infringed on the intellectual property rights of others. A more detailed description of these and certain other factors that could affect actual results is included in the Company’s filings with 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 hereof. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date hereof, except as may be required by law.
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Condensed Consolidated Statements of Operations
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(1) Other loss, net consisted of the following (in thousands):
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Condensed Consolidated Balance Sheets
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Condensed Consolidated Statements of Cash Flows
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Segment Information
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(1) Revenues by major category within each segment are presented below (in thousands):(2) Corporate-level activity included the following (in thousands):Blucora, Inc.
Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures (1)Adjusted EBITDA Reconciliation (1)
(Unaudited) (Amounts in thousands)Non-GAAP Net Income and Non-GAAP Net Income Per Share Reconciliation (1)
(Unaudited) (Amounts in thousands, except per share amounts)
Notes to Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measure
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