Blucora Announces Third Quarter 2020 Results

DALLAS, Nov. 09, 2020 (GLOBE NEWSWIRE) -- Blucora, Inc. (NASDAQ: BCOR), a provider of data and technology-driven tax software and wealth management solutions that empower people to improve their financial wellness, today announced financial results for the third quarter ended September 30, 2020.

Third Quarter Highlights and Recent Developments

  • Closed acquisition of HK Financial Services, adding a historically fast-growing, highly profitable registered investment advisor (“RIA”) to the Company’s wealth management business
  • Advisory assets increased 23% year-over-year, including addition of HKFS
  • Total client assets ended the quarter at $76.2 billion, with $32.4 billion, or 42.6% in advisory assets
  • Announced appointment of Karthik Rao, Nielsen COO, to our Board of Directors

“I’m pleased to report that Blucora’s third quarter results showed incremental improvement and came in better than expected on a number of metrics,” commented Chris Walters, Blucora’s President and Chief Executive Officer.  “In wealth management, we hit record levels of advisory assets. Our acquisition of HK Financial Services allows us to serve CPA firms and tax advisors in compelling new ways. In tax preparation, we completed the extended tax season while simultaneously working to ensure that we will enter the fast-approaching new season optimized across product and marketing.”

“Over the first nine months of my tenure, we have identified several key challenges and opportunities and acted quickly to address a number of immediate needs. We have brought on the right people and aligned our organizational structure to a common set of goals. We’ve developed plans to ensure that we have the right technology systems and service models across the Company and laid the groundwork to test synergies across our two business units. We have done all of this while facing the COVID-19-related headwinds, and I believe we are making the right moves to set Blucora up for sustainable long-term success.”

Summary Financial Performance: Q3 2020
($ in millions except per share amounts)

 Q3 2020 Q3 2019 Change
Revenue:     
Wealth Management$135.9   $145.4   (7)%
Tax Preparation$39.4   $3.6   999 %
Total Revenue$175.4   $149.0   18 %
Segment Operating Income:     
Wealth Management$17.5   $20.6   (15)%
Tax Preparation$16.2   $(12.1)  (234)%
Total Segment Operating Income$33.7   $8.6   294 %
Unallocated Corporate-Level General and Administrative Expenses$(6.7)  $(6.5)  4 %
GAAP:     
Operating Income (Loss)$1.0   $(72.1)  (101)%
Net Loss Attributable to Blucora, Inc.$(26.2)  $(62.4)  (58)%
Diluted Net Loss Per Share Attributable to Blucora, Inc.$(0.55)  $(1.28)  (58)%
Non-GAAP: (1)     
Adjusted EBITDA$27.0   $2.1   1197 %
Net Income (Loss)$15.1   $(9.6)  (257)%
Diluted Net Income (Loss) per Share (EPS)$0.31   $(0.20)  (255)%

_________________________
(1)    See reconciliations of all non-GAAP to GAAP measures presented in this release in the tables below.

Full Year 2020 Outlook

($ in millions except per share amounts)Prior OutlookCurrent OutlookDifference at
Midpoint
Wealth Management Revenue (1)$530.0 - $541.0$535.5 - $540.5$2.5
TaxAct Revenue$203.0 - $206.0$207.0 - $208.0$3.0
Total Revenue$733.0 - $747.0$742.5 - $748.5$5.5
Wealth Management Segment Operating Income (1)$65.5 - $69.5$68.5 - $70.5$2.0
TaxAct Segment Operating Income$46.5 - $48.0$47.5 - $48.5$0.8
Unallocated Corporate-Level General and Administrative Expenses$26.0 - $24.5$27.5 - $26.5$1.8
GAAP:   
Net Loss (1)($343.5) – ($334.0)($339.0) – ($333.0)$2.8
Net Loss per share (1)($7.09) – ($6.92)($7.05) – ($6.94)$0.01
Non-GAAP:   
Adjusted EBITDA (1)(2)$86.0 - $93.0$88.5 - $92.5$1.0
Non-GAAP Net Income (1)(2)$40.5 - $48.0$46.0 - $51.0$4.3
Non-GAAP Net Income per share (1)(2)$0.83 - $0.98$0.95 - $1.05$0.10

_________________________
(1) Includes HKFS results from July 1, 2020 to December 31, 2020.
(2) See reconciliations of all non-GAAP to GAAP measures presented in this release in the tables below.

Preliminary 2021 Tax Preparation Outlook

Due to the extended tax season in 2020, we believe it is more helpful to provide a full-year 2021, rather than first half, outlook for tax preparation. 

As we continue to improve our product features, implement our new marketing approach and prepare to launch our new hybrid-assisted offering, we feel confident approaching the new tax year.  At the same time, given our planned transition from price-driven growth to unit-driven growth, supplemented by ARPU benefits of incremental offerings, and the longer guidance period, we want to be appropriately cautious in our outlook. Given these and other factors, we are targeting low single digit revenue growth in tax preparation for full-year 2021 and reaffirming our prior segment operating income outlook, which calls for a minimum of $20 million improvement vs. 2020.

Conference Call and Webcast

A conference call and live webcast will be held today at 8:30 a.m. Eastern Time during which the Company will further discuss third quarter results, its outlook for full year 2020 and other business matters. We will also provide 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 furnished 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, a provider of data and technology-driven solutions that empowers people to improve their financial wellness. Blucora operates in two segments including (i) wealth management, through its tax-focused Avantax Wealth Management and HK Financial Services brands, with a collective $76 billion in total client assets as of September 30, 2020 and (ii) tax preparation, through its TaxAct business, a market leader in tax preparation software with approximately 3 million consumer and 20,000 professional users in 2020. With integrated tax focused software 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: Blucora

Contact:
Blucora Investor Relations
IR@Blucora.com
(972) 870-6463

This 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. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as “believes,” “estimates,” “should,” “could,” “would,” “plans,” “expects,” “intends,” “anticipates,” “may,” “forecasts,” “future,” “will,” “projects,” “predicts,” “potential,” “continues,” “target,” “outlook” and similar expressions and variations. Actual results may differ significantly from management’s expectations due to various risks and uncertainties including, but not limited to: the impact of the coronavirus pandemic on our results of operations and our business, including the impact of the resulting economic and market disruption, 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 professionals, 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 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 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.


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

 Three months ended
September 30,
 Nine months ended
September 30,
 2020 2019 2020 2019
Revenue:       
Wealth management services revenue$135,932   $145,428   $396,805   $362,791  
Tax preparation services revenue39,421   3,588   202,990   205,733  
Total revenue175,353   149,016   599,795   568,524  
Operating expenses:       
Cost of revenue:       
Wealth management services cost of revenue96,122   102,030   282,332   250,881  
Tax preparation services cost of revenue2,692   1,633   9,759   8,983  
Total cost of revenue98,814   103,663   292,091   259,864  
Engineering and technology6,007   8,635   21,899   22,323  
Sales and marketing31,018   19,976   150,785   104,804  
General and administrative18,605   19,642   63,533   55,721  
Acquisition and integration10,276   6,759   18,782   17,739  
Depreciation1,874   1,470   5,345   3,846  
Amortization of other acquired intangible assets7,746   10,082   22,167   27,295  
Impairment of goodwill and an intangible asset   50,900   270,625   50,900  
Total operating expenses174,340   221,127   845,227   542,492  
Operating income (loss)1,013   (72,111)  (245,432)  26,032  
Other loss, net (1)(11,963)  (2,606)  (23,386)  (11,682) 
Income (loss) before income taxes(10,950)  (74,717)  (268,818)  14,350  
Income tax benefit (expense)(15,256)  12,331   (23,237)  16,470  
Net income (loss) attributable to Blucora, Inc.$(26,206)  $(62,386)  $(292,055)  $30,820  
Net income (loss) per share attributable to Blucora, Inc.:       
Basic$(0.55)  $(1.28)  $(6.09)  $0.64  
Diluted$(0.55)  $(1.28)  $(6.09)  $0.62  
Weighted average shares outstanding:       
Basic48,039   48,652   47,936   48,456  
Diluted48,039   48,652   47,936   49,596  

_________________________
(1)    Other loss, net consisted of the following (in thousands):

 Three months ended
September 30,
 Nine months ended
September 30,
 2020 2019 2020 2019
Interest expense$7,254   $5,469   $17,410   $14,015  
Amortization of debt issuance costs362   301   1,006   848  
Accretion of debt discounts276   66   414   189  
Total interest expense7,892   5,836   18,830   15,052  
Interest income(2)  (52)  (27)  (341) 
Gain on the sale of a business(349)  (3,256)  (349)  (3,256) 
Non-capitalized debt issuance costs3,687      3,687     
Other735   78   1,245   227  
Other loss, net$11,963   $2,606   $23,386   $11,682  



Blucora, Inc.

Condensed Consolidated Balance Sheets
(Unaudited) (Amounts in thousands)

 September 30,
2020
 December 31,
2019
ASSETS   
Current assets:   
Cash and cash equivalents$151,166   $80,820  
Cash segregated under federal or other regulations203   5,630  
Accounts receivable, net of allowance12,191   16,266  
Commissions receivable22,656   21,176  
Other receivables5,811   2,902  
Prepaid expenses and other current assets, net9,428   12,349  
Total current assets201,455   139,143  
Long-term assets:   
Property and equipment, net53,940   18,706  
Right-of-use assets, net24,028   10,151  
Goodwill, net449,221   662,375  
Other intangible assets, net331,014   290,211  
Deferred tax asset, net   9,997  
Other long-term assets4,093   6,989  
Total long-term assets862,296   998,429  
Total assets$1,063,751   $1,137,572  
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current liabilities:   
Accounts payable$6,464   $10,969  
Commissions and advisory fees payable16,893   19,905  
Accrued expenses and other current liabilities42,815   36,144  
Deferred revenue—current4,281   12,014  
Lease liabilities—current1,552   3,272  
Current portion of long-term debt, net1,782   11,228  
Total current liabilities73,787   93,532  
Long-term liabilities:   
Long-term debt, net552,417   381,485  
Deferred tax liability, net12,802     
Deferred revenue—long-term6,478   7,172  
Lease liabilities—long-term36,973   5,916  
Other long-term liabilities22,150   5,952  
Total long-term liabilities630,820   400,525  
Total liabilities704,607   494,057  
    
Stockholders’ equity:   
Common stock, par $0.0001—900,000 authorized shares; 49,350 shares issued and 48,044 shares outstanding at September 30, 2020; 49,059 shares issued and 47,753 shares outstanding at December 31, 20195   5  
Additional paid-in capital1,594,384   1,586,972  
Accumulated deficit(1,206,846)  (914,791) 
Accumulated other comprehensive loss   (272) 
Treasury stock, at cost—1,306 shares at September 30, 2020 and December 31, 2019(28,399)  (28,399) 
Total stockholders’ equity359,144   643,515  
Total liabilities and stockholders’ equity$1,063,751   $1,137,572  



Blucora, Inc.

Condensed Consolidated Statements of Cash Flows
(Unaudited) (Amounts in thousands)

 Nine months ended September 30,
 2020 2019
Operating activities:   
Net income (loss)$(292,055)  $30,820  
Adjustments to reconcile net income (loss) to net cash from operating activities:   
Stock-based compensation7,220   11,164  
Depreciation and amortization of acquired intangible assets29,619   32,078  
Impairment of goodwill and an intangible asset270,625   50,900  
Reduction of right-of-use lease assets8,335   3,117  
Deferred income taxes23,199   (23,343) 
Amortization of debt issuance costs1,006   848  
Accretion of debt discounts414   189  
Gain on sale of a business(349)  (3,256) 
Change in fair value of acquisition-related contingent consideration(1,000)    
Accretion of lease liability1,413   460  
Other984   48  
Cash provided (used) by changes in operating assets and liabilities:   
Accounts receivable12,267   352  
Commissions receivable(1,480)  (19) 
Other receivables(2,909)  (18) 
Prepaid expenses and other current assets2,555   13,828  
Other long-term assets2,763   497  
Accounts payable(7,018)  (2,346) 
Commissions and advisory fees payable(3,012)  (602) 
Lease liabilities(3,568)  (3,371) 
Deferred revenue(8,582)  (21,694) 
Accrued expenses and other current and long-term liabilities(5,113)  6,595  
Net cash provided by operating activities35,314   96,247  
Investing activities:   
Business acquisition, net of cash acquired(102,425)  (166,561) 
Purchases of property and equipment(28,711)  (6,887) 
Proceeds from sale of a business, net of cash349   7,467  
Net cash used by investing activities(130,787)  (165,981) 
Financing activities:   
Proceeds from credit facilities226,278   121,489  
Payments on credit facilities(66,078)    
Stock repurchases   (11,968) 
Payment of redeemable noncontrolling interests   (24,945) 
Proceeds from stock option exercises25   3,811  
Proceeds from issuance of stock through employee stock purchase plan1,201   1,144  
Tax payments from shares withheld for equity awards(1,034)  (5,508) 
Contingent consideration payments for business acquisition   (943) 
Net cash provided by financing activities160,392   83,080  
Effect of exchange rate changes on cash, cash equivalents, and restricted cash   38  
Net increase in cash, cash equivalents, and restricted cash64,919   13,384  
Cash, cash equivalents, and restricted cash, beginning of period86,450   85,366  
Cash, cash equivalents, and restricted cash, end of period$151,369   $98,750  



Blucora, Inc.

Segment Information
(Unaudited) (Amounts in thousands)

 Three months ended
September 30,
 Nine months ended
September 30,
 2020 2019 2020 2019
Revenue:       
Wealth Management (1)$135,932   $145,428   $396,805   $362,791  
Tax Preparation (1)39,421   3,588   202,990   205,733  
Total revenue175,353   149,016   599,795   568,524  
Operating income (loss):       
Wealth Management17,498   20,631   51,827   49,150  
Tax Preparation16,234   (12,075)  60,646   108,565  
Corporate-level activity (2)(32,719)  (80,667)  (357,905)  (131,683) 
Total operating income (loss)1,013   (72,111)  (245,432)  26,032  
Other loss, net(11,963)  (2,606)  (23,386)  (11,682) 
Income tax benefit (expense)(15,256)  12,331   (23,237)  16,470  
Net income (loss) attributable to Blucora, Inc.$(26,206)  $(62,386)  $(292,055)  $30,820  

_________________________
(1)    Revenues by major category within each segment are presented below (in thousands):

 Three months ended
September 30,
 Nine months ended
September 30,
 2020 2019 2020 2019
Wealth Management:       
Advisory$82,612  $75,579   $227,672  $176,746 
Commission44,921  52,623   135,337  137,851 
Asset-based4,351  13,618   18,911  36,530 
Transaction and fee4,048  3,608   14,885  11,664 
Total Wealth Management revenue$135,932  $145,428   $396,805  $362,791 
Tax Preparation:       
Consumer$38,482  $4,280   $186,724  $190,908 
Professional939  (692)  16,266  14,825 
Total Tax Preparation revenue$39,421  $3,588   $202,990  $205,733 

(2) Corporate-level activity included the following (in thousands):

 Three months ended
September 30,
 Nine months ended
September 30,
 2020 2019 2020 2019
General and administrative expenses$6,745  $6,476  $19,571  $19,802 
Stock-based compensation4,517  4,639  7,220  11,164 
Acquisition and integration costs10,276  6,759  18,782  17,739 
Executive transition costs405    10,225   
Headquarters relocation costs410    1,863   
Depreciation2,620  1,811  7,452  4,783 
Amortization of acquired intangible assets7,746  10,082  22,167  27,295 
Impairment of goodwill and an intangible asset  50,900  270,625  50,900 
Total corporate-level activity$32,719  $80,667  $357,905  $131,683 


Blucora, Inc.
Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures (1)

Adjusted EBITDA Reconciliation (1)
(Unaudited) (Amounts in thousands)

 Three months ended
September 30,
 Nine months ended
September 30,
 2020 2019 2020 2019
Net income (loss) attributable to Blucora, Inc. (2)$(26,206)  $(62,386)  $(292,055)  $30,820  
Stock-based compensation4,517   4,639   7,220   11,164  
Depreciation and amortization of acquired intangible assets10,366   11,893   29,619   32,078  
Other loss, net11,963   2,606   23,386   11,682  
Acquisition and integration costs10,276   6,759   18,782   17,739  
Impairment of goodwill and an intangible asset   50,900   270,625   50,900  
Executive transition costs405      10,225     
Headquarters relocation costs410      1,863     
Income tax (benefit) expense15,256   (12,331)  23,237   (16,470) 
Adjusted EBITDA$26,987   $2,080   $92,902   $137,913  


Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) Per Share Reconciliation (1)
(Unaudited) (Amounts in thousands, except per share amounts)

 Three months ended
September 30,
 Nine months ended
September 30,
 2020 2019 2020 2019
Net income (loss) attributable to Blucora, Inc. (2)$(26,206)  $(62,386)  $(292,055)  $30,820  
Stock-based compensation4,517   4,639   7,220   11,164  
Amortization of acquired intangible assets7,746   10,082   22,167   27,295  
Gain on the sale of a business(349)  (3,256)  (349)  (3,256) 
Acquisition and integration costs10,276   6,759   18,782   17,739  
Impairment of goodwill and an intangible asset   50,900   270,625   50,900  
Executive transition costs405      10,225     
Headquarters relocation costs410      1,863     
Non-capitalized debt issuance costs3,687      3,687     
Cash tax impact of adjustments to GAAP net income(418)  (710)  (1,413)  (1,892) 
Non-cash income tax (benefit) expense14,987   (15,593)  22,327   (23,759) 
Non-GAAP net income (loss)$15,055   $(9,565)  $63,079   $109,011  
Per diluted share:       
Net income (loss) attributable to Blucora, Inc. (2) (3)$(0.54)  $(1.28)  $(6.06)  $0.62  
Stock-based compensation0.09   0.10   0.15   0.23  
Amortization of acquired intangible assets0.16   0.19   0.46   0.55  
Gain on the sale of a business(0.01)  (0.07)  (0.01)  (0.07) 
Acquisition and integration costs0.21   0.14   0.39   0.36  
Impairment of goodwill and an intangible asset   1.05   5.62   1.03  
Executive transition costs0.01      0.21     
Headquarters relocation costs0.01      0.04     
Non-capitalized debt issuance costs0.08      0.08     
Cash tax impact of adjustments to GAAP net income(0.01)  (0.01)  (0.03)  (0.04) 
Non-cash income tax (benefit) expense0.31   (0.32)  0.46   (0.48) 
Non-GAAP net income (loss) per share$0.31   $(0.20)  $1.31   $2.20  
Weighted average shares outstanding used in computing per diluted share amounts48,203   48,652   48,184   49,596  


Adjusted EBITDA Reconciliation for Forward-Looking Guidance (1)
(Amounts in thousands)

 Ranges for the year ending
 December 31, 2020
 Low High
Net loss attributable to Blucora, Inc.$(339,000)  $(333,000) 
Stock-based compensation11,900   11,800  
Depreciation and amortization of acquired intangible assets40,800   40,500  
Other loss, net31,700   31,200  
Acquisition, integration, executive transition, and headquarters relocation costs40,900   40,600  
Impairment of goodwill270,600   270,600  
Income tax expense31,600   30,800  
Adjusted EBITDA$88,500   $92,500  


Non-GAAP Net Income and Non-GAAP Net Income Per Share Reconciliation
for Forward-Looking Guidance (1)
(Amounts in thousands, except per share amounts)

 Ranges for the year ending
 December 31, 2020
 Low High
Net loss attributable to Blucora, Inc.$(339,000)  $(333,000) 
Stock-based compensation11,900   11,800  
Amortization of acquired intangible assets30,000   29,900  
Acquisition, integration, executive transition, and headquarters relocation costs40,900   40,600  
Debt issuance expenses3,700   3,700  
Impairment of goodwill270,600   270,600  
Gain on sale of a business(300)  (300) 
Cash tax impact of adjustments to net loss(1,900)  (1,800) 
Non-cash income tax expense30,100   29,500  
Non-GAAP net income$46,000   $51,000  
Per diluted share:   
Net loss attributable to Blucora, Inc. (4)$(6.98)  $(6.87) 
Stock-based compensation0.24   0.24  
Amortization of acquired intangible assets0.62   0.62  
Acquisition, integration, executive transition, and headquarters relocation costs0.84   0.84  
Debt issuance expenses0.08   0.08  
Impairment of goodwill5.57   5.58  
Gain on sale of a business     
Cash tax impact of adjustments to net loss(0.04)  (0.04) 
Non-cash income tax expense0.62   0.60  
Non-GAAP net income per share$0.95   $1.05  
Weighted average shares outstanding used in computing per diluted share amounts48,600   48,500  



Adjusted EBITDA Reconciliation for Prior Guidance (1)
(Amounts in thousands)

 Ranges for the year ending
 December 31, 2020
 Low High
Net loss attributable to Blucora, Inc.$(343,500)  $(334,000) 
Stock-based compensation12,100   11,900  
Depreciation and amortization of acquired intangible assets47,800   45,500  
Other loss, net31,800   31,300  
Acquisition, integration, executive transition, and headquarters relocation costs43,300   43,000  
Impairment of goodwill270,600   270,600  
Income tax expense23,900   24,700  
Adjusted EBITDA$86,000   $93,000  


Non-GAAP Net Income and Non-GAAP Net Income Per Share Reconciliation for Prior Guidance (1)
(Amounts in thousands, except per share amounts)

 Ranges for the year ending
 December 31, 2020
 Low High
Net loss attributable to Blucora, Inc.$(343,500)  $(334,000) 
Stock-based compensation12,100   11,900  
Amortization of acquired intangible assets34,700   32,900  
Acquisition, integration, executive transition, and headquarters relocation costs43,300   43,000  
Debt issuance expenses4,300   4,300  
Impairment of goodwill270,600   270,600  
Cash tax impact of adjustments to net loss(1,900)  (1,800) 
Non-cash income tax expense20,900   21,100  
Non-GAAP net income$40,500   $48,000  
Per diluted share:   
Net loss attributable to Blucora, Inc. (5)$(7.00)  $(6.83) 
Stock-based compensation0.25   0.24  
Amortization of acquired intangible assets0.70   0.68  
Acquisition, integration, executive transition, and headquarters relocation costs0.88   0.88  
Debt issuance expenses0.09   0.09  
Impairment of goodwill5.52   5.53  
Cash tax impact of adjustments to net loss(0.04)  (0.04) 
Non-cash income tax expense0.43   0.43  
Non-GAAP net income per share$0.83   $0.98  
Weighted average shares outstanding used in computing per diluted share amounts49,050   48,900  


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

(1)   We define Adjusted EBITDA as net income (loss) attributable to Blucora, Inc., determined in accordance with GAAP, excluding the effects of stock-based compensation, depreciation and amortization of acquired intangible assets, other loss, net, acquisition and integration costs, impairment of goodwill and an intangible asset, executive transition costs, headquarters relocation costs, and income tax (benefit) expense. Acquisition and integration costs primarily relate to the acquisition of 1st Global and the acquisition of HKFS. Impairment of goodwill relates to the impairment of our Wealth Management reporting unit goodwill that was recognized in the first quarter of 2020. Impairment of an intangible asset relates to the impairment of the HD Vest trade name intangible asset following the rebranding of the Wealth Management business in the third quarter of 2019. Executive transition costs relate to the departure of certain executives in the first quarter of 2020. Headquarters relocation costs relate to the ongoing process to move from our Dallas and Irving offices to our new headquarters.

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 net income (loss). 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 net income (loss) as net income (loss) attributable to Blucora, Inc., determined in accordance with GAAP, excluding the effects of stock-based compensation, amortization of acquired intangible assets, gain on the sale of a business, acquisition and integration costs, impairment of goodwill and an intangible asset, executive transition costs, headquarters relocation costs, non-capitalized debt issuance expense, the related cash tax impact of those adjustments, and non-cash income tax (benefit) expense. We exclude the non-cash portion of income tax expense because of our ability to offset a substantial portion of our cash tax liabilities by using deferred tax assets, which primarily consist of U.S. federal net operating losses. The majority of these net operating losses will expire, if unutilized, between 2020 and 2024. Gain on the sale of a business relates to the disposition of SimpleTax in the third quarter of 2019 and the subsequent working capital adjustment in the third quarter of 2020. Non-capitalized debt issuance expense relates to the expense recognized as a result of the increase to our term loan in the third quarter of 2020.

We believe that non-GAAP net income (loss) and non-GAAP net income (loss) 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 net income (loss) and non-GAAP net income (loss) per share are common measures used by investors and analysts to evaluate our performance and the valuation of our business. Non-GAAP net income (loss) and non-GAAP net income (loss) per share 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 net income (loss) and net income (loss) per share. Other companies may calculate non-GAAP net income (loss) and non-GAAP net income (loss) per share differently, and, therefore, our non-GAAP net income (loss) and non-GAAP net income (loss) per share may not be comparable to similarly titled measures of other companies.

(2)   As presented in the condensed consolidated statements of operations (unaudited).

(3)   As presented in the condensed consolidated statements of comprehensive income(loss), net loss per share attributable to Blucora, Inc. was $0.55 and $6.09 for the three and nine months ended September 30, 2020, respectively, and was calculated based on weighted average shares outstanding of 48,039,000 and 47,936,000, respectively, which excluded the effect of potentially dilutive shares due to the net loss earned for the period. For non-GAAP reconciliation purposes, net loss per share attributable to Blucora, Inc. of $0.54 and $6.06 for the three and nine months ended September 30, 2020, respectively, included the effects of potentially dilutive shares due to non-GAAP net income during the period.

(4)   As presented in the “Full Year 2020 Outlook” section of this press release, the range of net loss per share attributable to Blucora, Inc. for the year ending December 31, 2020 (Current Outlook) was $6.94 to $7.05, and these amounts were calculated based on weighted average shares outstanding of 48,000,000 and 48,100,000, respectively, which excluded the effect of potentially dilutive shares due to the net loss earned for the period. For non-GAAP reconciliation purposes, net loss per share attributable to Blucora, Inc. included the effect of potentially dilutive shares due to non-GAAP net income projected to be earned during these periods.

(5)   As presented in the “Full Year 2020 Outlook” section of this press release, the range of net loss per share attributable to Blucora, Inc. for the year ending December 31, 2020 (Prior Outlook) was $6.92 to $7.09, and these amounts were calculated based on weighted average shares outstanding of 48,300,000 and 48,450,000, respectively, which excluded the effect of potentially dilutive shares due to the net loss earned for the period. For non-GAAP reconciliation purposes, net loss per share attributable to Blucora, Inc. included the effect of potentially dilutive shares due to non-GAAP net income projected to be earned during these periods.

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