Blucora Announces Third Quarter 2019 Results

November 6, 2019

IRVING, Texas, Nov. 06, 2019 (GLOBE NEWSWIRE) -- Blucora, Inc. (NASDAQ: BCOR), a leading provider of tax-smart financial solutions that empower people’s goals, today announced financial results for the third quarter ended September 30, 2019.

Third Quarter Highlights and Recent Developments

  • Increased total revenue by 56% year-over-year (y/y), including addition of 1st Global for full quarter
  • Legacy HD Vest advisory assets increased 9% y/y, legacy 1st Global advisory assets increased 16% y/y
  • Total Client Assets ended the quarter at $67.7 billion, with $26.3 billion, or 39% in Advisory Assets
  • Integration of legacy wealth management businesses running better than plan; Completed consolidation on the same clearing platform ahead of schedule, and unified both under new brand, Avantax Wealth Management
  • Repurchased more than 560,000 shares of common stock, or 1.1% of outstanding shares - first under current authorization

“In our first full quarter since the acquisition of 1st Global, I’m pleased to report solid quarterly results as well as an integration that is now running ahead of plan,” said John Clendening, Blucora’s President and Chief Executive Officer.  “Integration synergy capture is running strong in the short-term, and the early consolidation of our legacy wealth management businesses from a clearing platform perspective, should allow for additional synergy capture over the long-term.  I’m also excited to announce that we have unified our legacy wealth management brands, HD Vest and 1st Global, under a powerful new brand, Avantax Wealth Management, as we aim to redefine what tax-smart wealth management means and provide superior results for our clients.”

Summary Financial Performance: Q3 2019
($ in millions except per share amounts)

  Q3   Q3    
  2019     2018     Change
Revenue:          
Wealth Management $ 145.4     $ 91.9     58 %
Tax Preparation $ 3.6     $ 3.5     3 %
Total Revenue $ 149.0     $ 95.4     56 %
Segment Income:          
Wealth Management $ 20.6     $ 12.9     60 %
Tax Preparation $ (12.1 )   $ (6.9 )   74 %
Total Segment Income $ 8.6     $ 6.0     44 %
Unallocated Corporate Operating Expenses $ (6.5 )   $ (4.6 )   42 %
GAAP:          
Operating Loss $ (72.1 )   $ (10.7 )   574 %
Net Loss Attributable to Blucora, Inc. $ (62.4 )   $ (14.0 )   347 %
Diluted Net Loss Per Share Attributable to Blucora, Inc. (EPS) $ (1.28 )   $ (0.37 )   246 %
Non-GAAP*:          
Adjusted EBITDA* $ 2.1     $ 1.4     50 %
Net Loss* $ (9.6 )   $ (4.4 )   116 %
Diluted Net Loss Per Share (EPS)* $ (0.20 )   $ (0.09 )   122 %
* See reconciliations of all non-GAAP to GAAP measures presented in this release in the tables below.


Third Quarter Results vs. Prior Guidance        
$ in millions Prior Guidance Midpoint Actual Difference at Midpoint
Wealth Management Revenue $139.0 - $145.5 142.3   145.4   3.2  
TaxAct Revenue $3.5 – $4.0 3.8   3.6**   (0.2 )
Total Revenue $142.5 - $149.5 146.0   149.0   3.0  
Wealth Management Segment Income $18.5 - $21.5 20   20.6   0.6  
TaxAct Segment Income ($13.5) - ($14.0) (13.8 ) (12.0 ) 1.7  
Corporate Unallocated Operating Expenses $8.0 - $8.5 8.3   6.5   1.8  
Adjusted EBITDA $0.0 - ($4.0) (2.0 ) 2.1   4.1  
**Includes an immaterial adjustment to previously recognized revenue.  The adjustment is expected to reverse in 1Q’2020.

Full Year 2019 Outlook
The company has updated its full-year 2019 outlook to reflect current business conditions, including the clearing consolidation occurring ahead of schedule, a 25 basis-point change in the Federal Funds target rate and other items.

$ in millions Prior Guidance Current Outlook Difference at Midpoint
Wealth Management Revenue $500.0 - $513.0 $505.0 - $510.0 1.0  
TaxAct Revenue $210.0 - $211.0 $209.5 - $210.5 (0.5 )
Total Revenue $710.0 - $724.0 $714.5 - $720.5 0.5  
Wealth Management Segment Income $67.0 - $73.5 $67.0 - $69.5 (2.0 )
TaxAct Segment Income $93.0 - $94.5 $93.0 - $94.5 -  
Corporate Unallocated Operating Expense $28.5 - $29.5 $28.5 - $29.5 -  
Adjusted EBITDA* $130.5 - $139.5 $130.5 - $135.5 (2.0 )
Net Income $27.0 - $37.5 ($0.4) - ($5.4) (35.0 )
Net Income per share $0.54 - $0.75 ($0.01) - ($0.11) (0.67 )
Non-GAAP Net Income* $92.5 - $102.5 $93.5 - $99.5 (1.0 )
Non-GAAP Net Income per share* $1.84 - $2.04 $1.88 - $2.01 -  

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 the full year 2019 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 http://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 wealth management, through its Avantax Wealth Management (formerly operating under the HD Vest and 1st Global brands) businesses, the No. 1 tax-focused broker-dealer,  with $67 billion in total client assets as of September 30, 2019, and tax preparation, through its TaxAct business, the No. 3 tax preparation software by market share with approximately 3 million consumer and professional users. With integrated tax and wealth management, Blucora is uniquely positioned to provide better long-term outcomes for customers with holistic, tax-advantaged solutions. For more information on Blucora, visit www.blucora.com.

Source: Blucora

Blucora Contact:

Bill Michalek (972) 870-6463

VP, Investor Relations

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. 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: 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 customers; our ability to realize all of the anticipated benefits of the acquisition of 1st Global, as well as our ability to integrate the operations of 1st Global; the availability of financing and our ability to meet our current and future debt service obligations and comply with our debt covenants; our ability to generate strong investment performance for our customers and the impact of the financial markets on our customers’ portfolios; political and economic conditions and events that directly or indirectly impact the wealth management and tax preparation industries; our ability to attract and retain productive financial advisors; our ability to successfully make technology enhancements and introduce new and improve on existing products and services; our expectations concerning the revenues we generate from fees associated with the financial products that we distribute; our ability to manage leadership and employee transitions; risks related to goodwill and other intangible asset impairment; our ability to comply with regulations (or interpretations thereof) applicable to the wealth management and tax preparation industries, including increased costs associated with or reductions in revenue resulting from new or changing regulations or interpretations of existing regulations; risks associated with our business being subject to enhanced regulatory scrutiny; our ability to comply with laws and regulations regarding privacy and protection of data; our expectations concerning the benefits that may be derived from our clearing platform and our investment advisory platform; cybersecurity risks; our ability to maintain our relationships with third party partners; the seasonality of our business; litigation risks; our ability to attract and retain qualified employees; our assessments and estimates that determine our effective tax rate; the impact of new or changing tax legislation; our ability to develop, establish and maintain strong brands; our ability to protect our intellectual property; and our ability to effectively integrate other companies or assets that we may acquire. 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 of this report. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this report, except as may be required by law.


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

  Three Months Ended September 30,   Nine months ended September 30,
  2019     2018     2019     2018  
Revenue:              
Wealth management services revenue $ 145,428     $ 91,887     $ 362,791     $ 275,984  
Tax preparation services revenue 3,588     3,498     205,733     183,214  
Total revenue 149,016     95,385     568,524     459,198  
Operating expenses:              
Cost of revenue:              
Wealth management services cost of revenue 102,030     62,313     250,881     187,526  
Tax preparation services cost of revenue 1,633     1,370     8,983     8,182  
Amortization of acquired technology             99  
Total cost of revenue (1) 103,663     63,683     259,864     195,807  
Engineering and technology (1) 8,635     4,246     22,323     14,225  
Sales and marketing (1) 19,976     15,675     104,804     94,719  
General and administrative (1) 19,642     13,404     55,721     43,895  
Acquisition and integration 6,759         17,739      
Depreciation 1,470     798     3,846     3,706  
Amortization of other acquired intangible assets 10,082     8,271     27,295     25,384  
Impairment of intangible asset 50,900         50,900      
Restructuring (1)             291  
Total operating expenses 221,127     106,077     542,492     378,027  
Operating income (loss) (72,111 )   (10,692 )   26,032     81,171  
Other loss, net (2) (2,606 )   (3,863 )   (11,682 )   (11,850 )
Income (loss) before income taxes (74,717 )   (14,555 )   14,350     69,321  
Income tax benefit (expense) 12,331     818     16,470     (2,052 )
Net income (loss) (62,386 )   (13,737 )   30,820     67,269  
Net income attributable to noncontrolling interests     (227 )       (654 )
Net income attributable to Blucora, Inc.: $ (62,386 )   $ (13,964 )   $ 30,820     $ 66,615  
Net income (loss) per share attributable to Blucora, Inc.:              
Basic $ (1.28 )   $ (0.37 )   $ 0.64     $ 1.34  
Diluted $ (1.28 )   $ (0.37 )   $ 0.62     $ 1.28  
Weighted average shares outstanding:              
Basic 48,652     47,712     48,456     47,191  
Diluted 48,652     47,712     49,596     49,292  

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

  Three Months Ended September 30,   Nine months ended September 30,
  2019     2018     2019     2018  
Interest income $ (52 )   $ (119 )   $ (341 )   $ (217 )
Interest expense 5,469     3,744     14,015     11,772  
Amortization of debt issuance costs 301     172     848     659  
Accretion of debt discounts 66     38     189     125  
Loss on debt extinguishment             1,534  
Gain on sale of a business (3,256 )       (3,256 )    
Other 78     28     227     (2,023 )
Other loss, net $ 2,606     $ 3,863     $ 11,682     $ 11,850  


Blucora, Inc.

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

  September 30,
2019
  December 31,
2018
ASSETS      
Current assets:      
Cash and cash equivalents $ 97,466     $ 84,524  
Cash segregated under federal or other regulations 1,284     842  
Accounts receivable, net of allowance 16,803     15,721  
Commissions receivable 20,724     15,562  
Other receivables 7,424     7,408  
Prepaid expenses and other current assets, net 9,058     7,755  
Total current assets 152,759     131,812  
Long-term assets:      
Property and equipment, net 17,230     12,389  
Right-of-use assets, net 10,199      
Goodwill, net 663,005     548,685  
Other intangible assets, net 301,533     294,603  
Other long-term assets 9,902     10,236  
Total long-term assets 1,001,869     865,913  
Total assets $ 1,154,628     $ 997,725  
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable $ 12,139     $ 3,798  
Commissions and advisory fees payable 18,871     15,199  
Accrued expenses and other current liabilities 39,261     18,980  
Lease liabilities 4,163     46  
Deferred revenue 7,456     10,257  
Current portion of long-term debt, net 1,227      
Total current liabilities 83,117     48,280  
Long-term liabilities:      
Long-term debt, net 381,598     260,390  
Deferred tax liability, net 35,225     40,394  
Deferred revenue 7,403     8,581  
Lease liabilities 6,055     100  
Other long-term liabilities 6,384     7,440  
Total long-term liabilities 436,665     316,905  
Total liabilities 519,782     365,185  
       
Redeemable noncontrolling interests     24,945  
       
Stockholders’ equity:      
Common stock 5     5  
Additional paid-in capital 1,580,336     1,569,725  
Accumulated deficit (932,505 )   (961,689 )
Accumulated other comprehensive loss (272 )   (446 )
Treasury stock, at cost (12,718 )    
Total stockholders’ equity 634,846     607,595  
Total liabilities and stockholders’ equity $ 1,154,628     $ 997,725  

Blucora, Inc.
Preliminary Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Amounts in thousands)

  Nine months ended September 30,
  2019     2018  
Operating Activities:      
Net income $ 30,820     $ 67,269  
Adjustments to reconcile net income to net cash from operating activities:      
Stock-based compensation 11,164     9,559  
Depreciation and amortization of acquired intangible assets 32,078     29,539  
Impairment of intangible asset 50,900      
Reduction of right-of-use lease assets 3,117      
Deferred income taxes (23,343 )   (1,073 )
Amortization of premium on investments, net, and debt issuance costs 848     659  
Accretion of debt discounts 189     125  
Loss on debt extinguishment     1,534  
Gain on sale of a business (3,256 )    
Other 508      
Cash provided (used) by changes in operating assets and liabilities:      
Accounts receivable 352     4,636  
Commissions receivable (19 )   60  
Other receivables (18 )   3,149  
Prepaid expenses and other current assets 13,828     1,369  
Other long-term assets 497     (902 )
Accounts payable (2,346 )   (2,255 )
Commissions and advisory fees payable (602 )   (2,627 )
Lease liabilities (3,371 )    
Deferred revenue (21,694 )   (2,411 )
Accrued expenses and other current and long-term liabilities 6,595     (3,048 )
Net cash provided by operating activities 96,247     105,583  
Investing Activities:      
Business acquisition, net of cash acquired (166,561 )    
Purchases of property and equipment (6,887 )   (5,340 )
Proceeds from sale of a business, net of cash 7,467      
Net cash used by investing activities (165,981 )   (5,340 )
Financing Activities:      
Proceeds from credit facilities 121,489      
Payments on credit facilities     (80,000 )
Stock repurchases (11,968 )    
Payment of redeemable noncontrolling interests (24,945 )    
Proceeds from stock option exercises 3,811     11,738  
Proceeds from issuance of stock through employee stock purchase plan 1,144     1,608  
Tax payments from shares withheld for equity awards (5,508 )   (5,983 )
Contingent consideration payments for business acquisition (943 )   (1,315 )
Net cash provided (used) by financing activities 83,080     (73,952 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash 38     (11 )
Net increase in cash, cash equivalents, and restricted cash 13,384     26,280  
Cash, cash equivalents, and restricted cash, beginning of period 85,366     62,311  
Cash, cash equivalents, and restricted cash, end of period $ 98,750     $ 88,591  

Blucora, Inc.
Preliminary Segment Information
(Unaudited)
(Amounts in thousands)

  Three months ended September 30,   Nine months ended September 30,
  2019     2018     2019     2018  
Revenue:              
Wealth Management (1) $ 145,428     $ 91,887     $ 362,791     $ 275,984  
Tax Preparation (1) 3,588     3,498     205,733     183,214  
Total revenue 149,016     95,385     568,524     459,198  
Operating income (loss):              
Wealth Management 20,631     12,891     49,150     38,920  
Tax Preparation (12,075 )   (6,936 )   108,565     95,991  
Corporate-level activity (2) (80,667 )   (16,647 )   (131,683 )   (53,740 )
Total operating income (loss) (72,111 )   (10,692 )   26,032     81,171  
Other loss, net (2,606 )   (3,863 )   (11,682 )   (11,850 )
Income tax benefit (expense) 12,331     818     16,470     (2,052 )
Net income (loss) $ (62,386 )   $ (13,737 )   $ 30,820     $ 67,269  

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

  Three months ended September 30,   Nine months ended September 30,
  2019     2018   2019   2018
Wealth Management:              
Commission $ 52,623     $ 41,015   $ 137,851   $ 124,269
Advisory 75,579     41,443   176,746   120,802
Asset-based 13,618     6,979   36,530   21,457
Transaction and fee 3,608     2,450   11,664   9,456
Total Wealth Management revenue $ 145,428     $ 91,887   $ 362,791   $ 275,984
Tax Preparation:              
Consumer $ 4,280     $ 3,246   $ 190,908   $ 168,295
Professional (692 )   252   14,825   14,919
Total Tax Preparation revenue $ 3,588     $ 3,498   $ 205,733   $ 183,214

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

  Three months ended September 30,   Nine months ended September 30,
  2019     2018     2019     2018  
Operating expenses $ (6,476 )   $ (4,572 )   $ (19,802 )   $ (14,351 )
Stock-based compensation (4,639 )   (2,874 )   (11,164 )   (9,559 )
Acquisition and integration costs (6,759 )       (17,739 )    
Depreciation (1,811 )   (930 )   (4,783 )   (4,056 )
Amortization of acquired intangible assets (10,082 )   (8,271 )   (27,295 )   (25,483 )
Impairment of intangible asset (50,900 )       (50,900 )    
Restructuring             (291 )
Total corporate-level activity $ (80,667 )   $ (16,647 )   $ (131,683 )   $ (53,740 )

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

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

(In thousands) Three Months Ended September 30,   Nine months ended September 30,
  2019     2018     2019     2018
Net income (loss) attributable to Blucora, Inc. (2) $ (62,386 )   $ (13,964 )   $ 30,820     $ 66,615
Stock-based compensation 4,639     2,874     11,164     9,559
Depreciation and amortization of acquired intangible assets 11,893     9,201     32,078     29,539
Restructuring             291
Other loss, net (3) 2,606     3,863     11,682     11,850
Net income attributable to noncontrolling interests     227         654
Acquisition and integration costs 6,759         17,739    
Income tax (benefit) expense (12,331 )   (818 )   (16,470 )   2,052
Impairment of intangible asset 50,900     $     50,900    
Adjusted EBITDA $ 2,080     $ 1,383     $ 137,913     $ 120,560



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

  Three months ended September 30,   Nine months ended September 30,
  2019     2018     2019     2018  
Net income (loss) attributable to Blucora, Inc. (2) $ (62,386 )   $ (13,964 )   $ 30,820     $ 66,615  
Stock-based compensation 4,639     2,874     11,164     9,559  
Amortization of acquired intangible assets 10,082     8,271     27,295     25,483  
Impairment of intangible asset 50,900         50,900      
Gain on the sale of a business (3,256 )       (3,256 )    
Acquisition and integration costs 6,759         17,739      
Restructuring             291  
Impact of noncontrolling interests     227         654  
Cash tax impact of adjustments to GAAP net income (710 )   (505 )   (1,892 )   (1,721 )
Non-cash income tax (benefit) expense (1) (15,593 )   (1,333 )   (23,759 )   647  
Non-GAAP net income (loss) $ (9,565 )   $ (4,430 )   $ 109,011     $ 101,528  
Per diluted share:              
Net income (loss) attributable to Blucora, Inc. $ (1.28 )   $ (0.37 )   $ 0.62     $ 1.28  
Stock-based compensation 0.10     0.06     0.23     0.19  
Amortization of acquired intangible assets 0.19     0.18     0.55     0.52  
Impairment of intangible asset 1.05         1.03      
Gain on the sale of a business (0.07 )       (0.07 )    
Acquisition and integration costs 0.14         0.36      
Restructuring             0.01  
Impact of noncontrolling interests     0.08     0.00     0.08  
Cash tax impact of adjustments to GAAP net income (0.01 )   (0.01 )   (0.04 )   (0.03 )
Non-cash income tax (benefit) expense (0.32 )   (0.03 )   (0.48 )   0.01  
Non-GAAP net income (loss) per share $ (0.20 )   $ (0.09 )   $ 2.20     $ 2.06  
Weighted average shares outstanding used in computing per diluted share amounts 48,652     47,712     49,596     49,292  


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

  Ranges for the three months ending   Ranges for the year ending
  September 30, 2019   December 21, 2019
  Low   High   Low   High
Net loss attributable to Blucora, Inc. $ (35,500 )   $ (30,500 )   $ 27,000     $ 37,500  
Stock-based compensation 4,900     4,900     16,700     16,300  
Depreciation and amortization of acquired intangible assets 12,600     12,500     45,500     45,000  
Other loss, net (3) 6,100     5,900     20,900     20,700  
Acquisition and integration costs 6,500     6,100     22,400     22,000  
Income tax expense 1,400     1,100     (2,000 )   (2,000 )
Adjusted EBITDA $ (4,000 )   $     $ 130,500     $ 139,500  

Preliminary Non-GAAP Net Income Reconciliation for Prior Guidance (1)
(Amounts in thousands)

  Ranges for the year ending
  December 21, 2019
  Low   High
Net income attributable to Blucora, Inc. $ 27,000     $ 37,500  
Stock-based compensation 16,700     16,300  
Amortization of acquired intangible asset 37,000     37,000  
Acquisition and integration costs 22,400     22,000  
Cash tax impact of adjustments to net income (2,000 )   (2,000 )
Non-cash income tax benefit (8,600 )   (8,300 )
Non-GAAP net income $ 92,500     $ 102,500  
Per diluted share:      
Net income attributable to Blucora, Inc. $ 0.54     $ 0.75  
Stock-based compensation 0.33     0.32  
Amortization of acquired intangible asset 0.73     0.74  
Acquisition and integration costs 0.44     0.44  
Cash tax impact of adjustments to net income (0.04 )   (0.04 )
Non-cash income tax benefit (0.16 )   (0.17 )
Non-GAAP net income per share $ 1.84     $ 2.04  
Weighted average shares outstanding used in computing per diluted share amounts 50,400     50,200  


Preliminary Adjusted EBITDA Reconciliation for Forward-Looking Guidance (1)

(Amounts in thousands)

  Ranges for the year ending
  December 31, 2019
  Low   High
Net loss attributable to Blucora, Inc. $ (5,400 )   $ (400 )
Stock-based compensation 17,000     16,500  
Depreciation and amortization of acquired intangible assets 45,500     45,000  
Other loss, net (3) 19,000     18,000  
Acquisition and integration costs 24,000     23,500  
Impairment of intangible asset 51,000     51,000  
Income tax benefit (20,600 )   (18,100 )
Adjusted EBITDA $ 130,500     $ 135,500  


Preliminary Non-GAAP Net Income (Loss) Reconciliation for Forward-Looking Guidance (1)

(Amounts in thousands, except per share amounts)

  Ranges for the year ending
  December 31, 2019
  Low   High
Net loss attributable to Blucora, Inc. $ (5,400 )   $ (400 )
Stock-based compensation 17,000     16,500  
Amortization of acquired intangible assets 37,500     37,500  
Acquisition and integration costs 24,000     23,500  
Impairment of intangible asset 51,000     51,000  
Gain on sale of a business (3,300 )   (3,300 )
Cash tax impact of adjustments to net loss (2,300 )   (2,300 )
Non-cash income tax benefit (25,000 )   (23,000 )
Non-GAAP net income (loss) $ 93,500     $ 99,500  
Per diluted share:      
Net loss attributable to Blucora, Inc. $ (0.11 )   $ (0.01 )
Stock-based compensation 0.34     0.33  
Amortization of acquired intangible assets 0.76     0.76  
Acquisition and integration costs 0.48     0.47  
Impairment of intangible asset 1.03     1.03  
Gain on sale of a business (0.07 )   (0.07 )
Cash tax impact of adjustments to net loss (0.05 )   (0.05 )
Non-cash income tax benefit (0.50 )   (0.45 )
Non-GAAP net income per share $ 1.88     $ 2.01  
Weighted average shares outstanding used in computing per diluted share amounts 49,750     49,600  

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

(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, restructuring, other loss, net, the impact of noncontrolling interests, acquisition and integration costs and income tax (benefit) expense. Restructuring costs relate to the relocation of our corporate headquarters that were completed in 2018. Acquisition and integration costs relate to the acquisition of 1st Global.

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, the impairment of an intangible asset, gain on the sale of a business, acquisition and integration costs (described further under Adjusted EBITDA above), restructuring costs (described further under Adjusted EBITDA above), the impact of noncontrolling interests, 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 primarily consist of U.S. federal net operating losses.  The majority of these net operating losses will expire, if unutilized, between 2020 and 2024. The aforementioned items are only included in non-GAAP net income (loss) in the periods they occurred.

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 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 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, and gain/loss on debt extinguishment.

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Source: Blucora, Inc.