The virus gives and the virus takes away. Blucora saved $60 million on its original plan to pay $160 million for the purchase HK Financial Services. But the impact on the economy that cause the change in valuations that affected the purchase  price also caused the Blucora to write down $275.6 million in impaired goodwill for its Wealth Management business, 57 percent of the total.

 In its report of financial results for the first quarter, Blucora saidthere could be further impairment charges if the economy worsen, although executives said during the recent webcast for earnings for the period ended March 31 that they believe they have taken adequate steps that further action is not likely.

Blucora also saw tax preparation revenue drop because of the extension of the tax season deadline from April 15 to July 15. Tax prep revenue for the most recently ended period was $116.3, down 13 percent from a year earlier as filers waited. The extension has also added cost to the tax prepraration unit's operations.

“We  required to extend our marketing campaign over  the extension period,” CEO Chris Walters said during the webcast. The delay has also meant providing support to TaxAct customers for longer than normal.

Overall,  Blucora lost $315.5 million for the first quarter becuse of the writedown, compared to net income of $62.2 million a year earlier. Revenue was $263.3 million,a 16.6-percent increase from $225.8 million in last year’s corresponding period. Wealth management revenue was slightly less than $145 million, up 62 percent from $89.6 million.

 The company decided not to discount its tax products so heavily this season, which has led to a loss in filers. However, Wolters said TaxAct had undergone a significant change. “We anticipate product improvement will drive sales,” he said. Already, the new user mix is “double where we would have peaked the prior year.” That growth was spurred by last year’s acquisition of 1st. Global.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
Last modified on Thursday, 14 May 2020
Read 414 times
Rate this item
(0 votes)

Visit other PMG Sites:

click me
PMG360 is committed to protecting the privacy of the personal data we collect from our subscribers/agents/customers/exhibitors and sponsors. On May 25th, the European's GDPR policy will be enforced. Nothing is changing about your current settings or how your information is processed, however, we have made a few changes. We have updated our Privacy Policy and Cookie Policy to make it easier for you to understand what information we collect, how and why we collect it.
Ok Decline