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8-K - FORM 8-K - BLUCORA, INC.d350130d8k.htm
EX-99.1 - PRESS RELEASE - BLUCORA, INC.d350130dex991.htm

Exhibit 99.2

InfoSpace, Inc.

Q1 2012 Earnings

Supplemental Information

Table of Contents

 

Financial Information

  

Summary - Consolidated Financial Results

     2   

Reconciliation of Non-GAAP Financial Measures

     3   

Operating Metrics

  

Search

     4   

Tax Preparation

     5   

Pro-Forma Information

  

Q1 year-over-year Tax Preparation

     6   

Last 12 Months - Pro Forma Results

     7   

Last 12 Months - Levered Free Cash Flow

     8   

Reconciliation Pro Forma Non-GAAP Financial Measures

     9   

 

1


InfoSpace Consolidated Financial Results

(in thousands except earnings per share, rounding differences may exist)

 

     2010     2011     2012  
     FYE 12/31     1Q11     2Q11     3Q11     4Q11     FYE 12/31     1Q12  

Segment Revenue

              

Search

   $ 214,343      $ 51,650      $ 54,292      $ 56,257      $ 66,615      $ 228,814      $ 75,294   

Tax Preparation (1)

   $ 0      $ 0      $ 0      $ 0      $ 0      $ 0      $ 40,401   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 214,343      $ 51,650      $ 54,292      $ 56,257      $ 66,615      $ 228,814      $ 115,695   

Segment Income (2)

              

Search

   $ 49,266      $ 11,095      $ 11,534      $ 10,809      $ 12,768      $ 46,206      $ 13,373   

Tax Preparation (1)

   $ 0      $ 0      $ 0      $ 0      $ 0      $ 0      $ 22,134   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 49,266      $ 11,095      $ 11,534      $ 10,809      $ 12,768      $ 46,206      $ 35,507   

Segment Income % of Revenue

              

Search

     23     21     21     19     19     20     18

Tax Preparation

     na        na        na        na        na        na        55
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

     23     21     21     19     19     20     31

Unallocated Corporate Operating Expense

   $ 16,801      $ 2,130      $ 2,543      $ 2,307      $ 2,603      $ 9,583      $ 3,805 (3) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 32,465      $ 8,965      $ 8,991      $ 8,502      $ 10,165      $ 36,623      $ 31,702   

Other Unallocated Corporate

              

Depreciation

   $ 6,596      $ 1,451      $ 1,376      $ 1,115      $ 919      $ 4,861      $ 951   

Amortization of Intangibles

   $ 9,197      $ 958      $ 772      $ 518      $ 347      $ 2,595      $ 3,624 (4) 

Stock Compensation

   $ 13,919      $ 2,033      $ 1,338      $ 3,049 (5)    $ 1,267      $ 7,687      $ 6,708 (5) 

Other (Income) Expense

   -$ 15,244      -$ 75      -$ 107      $ 455      $ 972      $ 1,245      $ 1,555   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 14,468      $ 4,367      $ 3,379      $ 5,137      $ 3,505      $ 16,388      $ 12,838   

Income Before Taxes

   $ 17,997      $ 4,598      $ 5,612      $ 3,365      $ 6,660      $ 20,235      $ 18,864   

Income Tax

              

Cash

   $ 196      $ 113      $ 133      $ 68      $ 1,398      $ 1,712      $ 861   

Non-cash (6)

   $ 8,530      $ 1,589      $ 1,803      $ 1,221      -$ 17,613      -$ 13,000      $ 6,597   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

   $ 8,726      $ 1,702      $ 1,936      $ 1,289      -$ 16,215 (7)    -$ 11,288      $ 7,458   

Income from Continuing Operations

   $ 9,271      $ 2,896      $ 3,676      $ 2,076      $ 22,875      $ 31,523      $ 11,406   

Discontinued Operations Loss (8)

   -$ 4,593      -$ 1,573      -$ 8,354      $ 0      $ 0      -$ 9,927      $ 0   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GAAP Net Income (Loss)

   $ 4,678      $ 1,323      -$ 4,678      $ 2,076      $ 22,875      $ 21,596      $ 11,406   

GAAP Earnings Per Share

   $ 0.13      $ 0.04      -$ 0.12      $ 0.05      $ 0.57      $ 0.56      $ 0.28   

Non-GAAP Net Income

   $ 40,557      $ 7,433      $ 7,590      $ 6,846      $ 6,896      $ 28,765      $ 28,517   

Non-GAAP Earnings Per Share

   $ 1.10      $ 0.20      $ 0.20      $ 0.17      $ 0.17      $ 0.74      $ 0.70   

Outstanding Shares

     36,089        36,502        37,964        39,323        39,534        39,534        39,804   

Basic Shares

     35,886        36,339        37,422        38,568        39,448        37,954        39,692   

Fully-diluted Shares

     36,829        37,084        38,128        39,158        40,074        38,621        40,978   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash & Short-term Investment

   $ 253,736      $ 249,765      $ 263,402      $ 279,276      $ 293,551      $ 293,551      $ 129,868   

Outstanding Debt

   $ 0      $ 0      $ 0      $ 0      $ 0      $ 0      $ 85,000   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Cash

   $ 253,736      $ 249,765      $ 263,402      $ 279,276      $ 293,551      $ 293,551      $ 44,868   

 

(1) 

On January 31, 2012, the Company acquired TaxACT Holdings, Inc. and its wholly-owned subsidiary, 2nd Story Software, Inc., which operates the TaxACT tax preparation software and online service and software business. The TaxACT business consists of an online tax preparation service for individuals, tax preparation software for individuals and professional tax preparers, and ancillary data storage and financial services. The majority of the TaxACT business’s revenue is generated by the online service at www.taxact.com. As a highly seasonal business, almost all of the TaxACT revenue is generated in the first four months of the calendar year. Amounts represent the results of operations for the TaxACT business from February 1, 2012 to March 31, 2012.

(2) 

Amounts do not include amortization of acquired technology and costs associated with the operation of the Company’s data center that serves its tax preparation and search businesses, including depreciation, personnel expenses, (including stock-based compensation expense), energy, and bandwidth costs, and personnel costs associated with customer service.

(3)

Amount for the quarter ended March 31, 2012 includes $1.1 million in transaction costs related to the TaxACT acquisition.

(4) 

Amount for the quarter ended March 31, 2012 includes $3.4 million related to amortization of acquired intangible assets related to the TaxACT acquisition.

(5) 

In the quarter ended September 30, 2011, $1.9 million in stock-based compensation expense was recorded in association with issuance of a warrant. In the quarter ended March 31, 2011, $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.

(6) 

Amounts represent the non-cash portion of income tax expense from continuing operations. The Company excludes the non-cash portion of income tax expense because of its ability to offset a substantial portion of its cash tax liabilities by using these deferred tax assets. The majority of these deferred tax assets will expire if unutilized in 2020.

(7) 

Amount includes a tax benefit of $19.6 million, due to the release of the valuation allowance on deferred tax assets.

(8) 

In the quarter ended June 30, 2011, the Company completed the sale of its Mercantila e-commerce business. The operating results of that business have been presented as discontinued operations for all periods presented.

 

2


InfoSpace Non-GAAP Reconciliation (1)

(in thousands except earnings per share, rounding differences may exist)

 

     2010     2011     2012  
     FYE 12/31     1Q11     2Q11     3Q11     4Q11     FYE 12/31     1Q12  
Adjusted EBITDA               

Net Income (2)

   $ 4,678      $ 1,323      $ (4,678   $ 2,076      $ 22,875      $ 21,596      $ 11,406   

Discontinued operations

     4,593        1,573        8,354        —          —          9,927        —     

Depreciation

     6,596        1,451        1,376        1,115        919        4,861        951   

Amortization of intangible assets

     9,197        958        772        518        347        2,595        3,624   

Stock-based compensation

     13,919        2,033        1,338        3,049        1,267        7,687        6,708   

Other (income) expense (3)

     (15,244     (75     (107     455        972        1,245        1,555   

Income tax expense (benefit)

     8,726        1,702        1,936        1,289        (16,215     (11,288     7,458   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 32,465      $ 8,965      $ 8,991      $ 8,502      $ 10,165      $ 36,623      $ 31,702   
Non-GAAP Net Income               

Net Income (2)

   $ 4,678      $ 1,323      $ (4,678   $ 2,076      $ 22,875      $ 21,596      $ 11,406   

Discontinued operations

     4,593        1,573        8,354        —          —          9,927        —     

Amortization of acquired intangible assets

     9,197        958        772        518        347        2,595        3,624   

Stock-based compensation

     13,919        2,033        1,338        3,049        1,267        7,687        6,708   

Loss on derivative

     —          —          —          —          —          —          272   

Cash tax impacts of GAAP adjustments

     (360     (43     1        (18     20        (40     (90

Non-cash income tax expenses (benefit) from continuing operations (1)

     8,530        1,589        1,803        1,221        (17,613     (13,000     6,597   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (4)

   $ 40,557      $ 7,433      $ 7,590      $ 6,846      $ 6,896      $ 28,765      $ 28,517   
Non-GAAP Earnings Per Share               

Non-GAAP Net Income

   $ 40,557      $ 7,433      $ 7,590      $ 6,846      $ 6,896      $ 28,765      $ 28,517   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP Earnings Per Share (4)

   $ 1.10      $ 0.20      $ 0.20      $ 0.17      $ 0.17      $ 0.74      $ 0.70   

Fully-diluted Shares

     36,829        37,084        38,128        39,158        40,074        38,621        40,978   

 

(1)

For definitions of these non-GAAP financial measures and their relationship to the Company’s GAAP financial statements, please see Note 1 to the Company’s Reconciliations of Non-GAAP financial Measures to the Nearest Comparable GAAP Measure for the three months ended March 31, 2012 and 2011 in exhibit 99.1 to this Current Report on Form 8-K filed on March 9, 2012.

(2)

As presented in the Preliminary Condensed Consolidated Statements of Operations (unaudited).

(3)

Other loss (income), net includes such items as interest expense, interest income, derivative instrument gains or losses, foreign currency gains or losses, gains or losses from the disposal of assets, adjustments to the fair values of contingent liabilities related to business combinations, gains on resolutions of contingencies and litigation settlements.

(4)

Amounts previously disclosed have been revised to reflect the effect of classifying the Company’s Mercantila e-commerce business as discontinued operations.

 

3


InfoSpace Operating Metrics—Search

 

     2010     2011     2012  
     FYE 12/31     1Q11     2Q11     3Q11     4Q11     FYE 12/31     1Q12  

Revenue by Source

              

Owned & Operated (B2C)

     31     27     22     19     16     21     13

Distribution (B2B)

     69     73     78     81     84     79     87

 

* Owned & Operated includes revenue from the Make The Web Better acquisition in 2Q 2010; the installed base has experienced attrition since the acquisition. Owned & Operated also includes other development-stage initiatives.

 

4


InfoSpace Operating Metrics—Tax Preparation

(in thousands, rounding differences may exist)

 

     2011 Season through:      2012 Season through:      % Change Year over Year  
     3/31/11      4/19/11      3/31/12      4/18/12      3/31/12     4/18/12  

Consumer (DDIY) e-files

     3,626         4,654         3,913         5,025         8     8

 

5


Tax Preparation Segment—Pro Forma 1Q Year-over-Year Results

(in thousands, rounding differences may exist)

 

           (a)
1Q12
    1Q11     Growth  

Pro Forma Revenue

     $ 61,944      $ 56,758        9

Pro Forma Segment Income

     (b   $ 30,577      $ 28,564        7

Segment Margin

       49     50  

 

(a) Includes $650,000 of revenue not reported on a GAAP basis due to purchase accounting in February and March 2012, and revenue of $20.9 million for January 2012 (prior to acquisition).
(b) Excludes $120,000 and $1.1 million of non-operational expenses related to a non-consummated sales transaction for 1Q 2012 and 1Q 2011.

Tax Preparation Segment—Pro Forma Calendar Quarter Historical Performance

(in thousands, rounding differences may exist)

 

           2Q11     3Q11     4Q11     FY 2011  

Pro Forma Revenue

     $ 17,815      $ 2,004      $ 2,204      $ 78,782   

Pro Forma Segment Income

     (c   $ 10,556      $ (435   $ (1,134   $ 37,551   

Segment Margin

       59     -22     -51     48

 

(c) Excludes $1.8 million, $3.6 million, $2.9 million and $9.3 million of non-operational expenses related to a non-consummated sales transaction for 2Q 2011, 3Q 2011, 4Q 2011 and full-year 2011.

 

6


Pro Forma—Consolidated Financial Performance

twelve months ending 3/31/2012

(in thousands, rounding differences may exist)

 

     (a)
Tax
Preparation
           Search      Corporate     Consolidated  

Revenue

   $ 83,968         $ 252,458       $ —        $ 336,426   

Segment income

   $ 39,564         (b   $ 48,484       $ —        $ 88,048   

Unallocated Corporate expenses

   $ —           $ —         $ (11,260   $ (11,260
            

 

 

 

Adjusted EBITDA

             $ 76,788   

Non-GAAP Net Income

             $ 64,345   

Non-GAAP Earnings Per Share

             $ 1.63   

Diluted Shares for the twelve-month period ended March 31, 2012

  

       39,586   

 

(a) Includes $650,000 of revenue not reported on a GAAP basis due to purchase accounting in February and March 2012, and $42.9 million of revenue prior to the acquisition (April 2011 - January 2012).
(b) Includes $650,000 of revenue not reported on a GAAP basis due to purchase accounting in February and March 2012 and excludes $8.4 million of non-operational expenses related to a non-consummated sales transaction.

 

7


Pro-Forma Free Cash Flow (“FCF”)

twelve months ending 3/31/2012

(in thousands, rounding differences may exist)

 

Pro Forma Adjusted EBITDA

   $ 76,788     

Less—Pro Forma Capital Expenditures

   $ (2,100  

Less—Pro Forma Cash Taxes

   $ (800  
  

 

 

   

Unlevered FCF

   $ 73,888     

Less—Pro Forma Cash Interest Expense

   $ (5,000     (a
  

 

 

   

Levered FCF

   $ 68,888     
  

 

 

   

 

(a) Interest expense estimated at initial debt amount of $100 million and assumes a 5% interest rate, and as of March 31, 2012, $85 million of debt is outstanding.

 

8


InfoSpace Pro Forma Non-GAAP Reconciliation

twelve months ending 3/31/2012

(in thousands except rates, rounding differences may exist)

 

Pro Forma Adjusted EBITDA

  

Pro forma income from continuing operations

   $ 18,108   

Pro forma depreciation

     4,971   

Pro forma amortization of intangible assets

     22,033   

Pro forma stock-based compensation

     13,373   

Pro forma other expense, net

     7,034   

Pro forma income tax expense

     11,269   
  

 

 

 

Pro Forma Adjusted EBITDA

   $ 76,788   
  

 

 

 

Pro Forma Non-GAAP Net Income

  

Pro forma income from continuing operations

   $ 18,108   

Pro forma amortization of acquired intangible assets

     22,033   

Pro forma stock-based compensation

     13,373   

Loss on derivative

     272   

Pro forma cash tax impact of GAAP adjustments

     90   

Pro forma non-cash income tax expense from continuing operations

     10,469   
  

 

 

 

Pro forma non-GAAP net income

   $ 64,345   
  

 

 

 

Pro forma non-GAAP Earnings per share—diluted

   $ 1.63   

Weighted average diluted shares

     39,586   

 

(1) For definitions of these non-GAAP financial measures and their relationship to the Company’s GAAP financial statements, please see Note 1 to the Company’s Reconciliations of Non-GAAP financial Measures to the Nearest Comparable GAAP Measure for the three months ended March 31, 2012 and 2011 in exhibit 99.1 to this Current Report on Form 8-K filed on March 9, 2012.

 

9