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CST: 25/08/2019 15:05:24   

Blucora Reports Fourth Quarter and Full Year 2018 Results

192 Days ago

IRVING, Texas, Feb. 14, 2019 (GLOBE NEWSWIRE) -- Blucora, Inc. (NASDAQ: BCOR), a leading provider of technology-enabled financial solutions to consumers, small businesses and tax professionals, today announced financial results for the fourth quarter and full year ended December 31, 2018.

2018 Highlights and Recent Developments

  • Increased total revenue by 10% year-over-year
  • Grew GAAP Net income by 87%, Adjusted EBITDA by 19%, Non-GAAP net income by 36%
  • Achieved record advisory net flows at HD Vest, approaching $1 billion
  • Recorded 21st consecutive year of revenue growth at TaxAct, growing 16% year-over-year
  • Utilized strong cash flow generation to eliminate $80 million in debt, reducing net leverage ratio to 1.5x from 2.8x 
  • Completed clearing transition expected to generate more than $120 million in incremental HD Vest segment income over 10-year term

“Strong net flows in the fourth quarter helped cap an excellent year for Blucora,” said John Clendening, Blucora’s President and Chief Executive Officer.  “For the full year 2018 we generated outstanding financial results, achieving double-digit growth in revenue, earnings and cash flow, while hitting records in key metrics such as advisory flows.  At the same time, we strengthened our balance sheet, our platform and our team, laying the groundwork to capture the significant opportunities we see ahead.”


Summary Financial Performance: Q4 and Full Year 2018
($ in millions except per share amounts)

  Q4   Q4       Full Year   Full Year    
  2018   2017   Change   2018   2017   Change
Revenue                      
Wealth Management $ 97.2     $ 93.8     4  %   $ 373.2     $ 348.6     7  %
Tax Preparation $ 4.1     $ 4.0     2  %   $ 187.3     $ 160.9     16  %
  Total Revenue $ 101.3     $ 97.8     3  %   $ 560.5     $ 509.5     10  %
Segment Income (Loss)                      
Wealth Management $ 14.1     $ 14.2     (1 )%   $ 53.1     $ 50.9     4  %
Tax Preparation $ (8.7 )   $ (10.5 )   (17 )%   $ 87.2     $ 72.9     20  %
  Total Segment Income $ 5.4     $ 3.7     44  %   $ 140.3     $ 123.8     13  %
Unallocated Corporate Operating Expenses $ 6.1     $ 5.1     21  %   $ 20.5     $ 22.9     (11 )%
GAAP:                      
Operating Income (Loss) $ (13.5 )   $ (14.5 )   (7 )%   $ 67.7     $ 48.0     41  %
Net Income (Loss) Attributable to Blucora. Inc. $ (16.0 )   $ 10.0     (259 )%   $ 50.6     $ 27.0     87  %
Diluted Net Income (Loss) Per Share Attributable to Blucora. Inc.* $ (0.38 )   $ 0.21     (281 )%   $ 0.90     $ 0.57     58  %
Non-GAAP:                      
Adjusted EBITDA $ (0.8 )   $ (1.3 )   (44 )%   $ 119.8     $ 100.9     19  %
Net Income (Loss) $ (7.5 )   $ (5.7 )   32  %   $ 94.0     $ 69.1     36  %
Diluted Net Income (Loss) per Share $ (0.16 )   $ (0.12 )   33  %   $ 1.90     $ 1.46     30  %
* 2018 GAAP EPS includes noncontrolling interest redemption impacts of $(0.05) and (0.13) for Q4 2018 and Full Year 2018, respectively.

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

Tax Season Update
“For this tax season we’ve unveiled a number of advances and new benefits for customers to make the tax filing experience easier and more rewarding,” Clendening continued. “In addition to bringing back some of our most popular features like our personalized deduction maximizer and $100,000 accuracy guarantee, some improvements customers are seeing this year include:

  • A newly refreshed and modern website that allows customers to quickly identify the product that best fits their needs;
  • Ten Minute taxes, a streamlined and intuitive process to guide filers with simple returns to complete their returns in just ten minutes or less;
  • Refund Marketplace, which rewards filers with bonus money, up to a maximum of $599, when they allocate a portion of their refund to gift cards from an assortment of national retailers;
  • A redesigned BluPrint financial assessment, which can turn insights from your tax return in to actionable recommendations to save real money; and 
  • Many other improvements including more data import and product partners.”

“Based on early tax season data, we continue to expect first-half 2019 tax preparation revenue growth of approximately 7.5-10% versus the comparable period last year, with segment margin in the 56.7% to 57.7%. range.”

First Quarter Outlook
For the first quarter of 2019, the Company expects revenues to be between $213.5 million and $218.5 million, GAAP net income to be between $48.0 million and $50.5 million, or $0.95 to $1.00 per diluted share, Adjusted EBITDA to be between $68.5 million and $72.5 million, and Non-GAAP income to be between $60.0 million and $63.5 million, or $1.19 to $1.26 per diluted share.

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 fourth quarter and full year results, its outlook for the first quarter, 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 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 be available on our website.

About Blucora®
Blucora, Inc. (NASDAQ: BCOR) is a leading provider of technology-enabled financial solutions to consumers, small businesses and tax professionals.  Our products and services in tax preparation and wealth management, through TaxAct and HD Vest, respectively, help consumers manage their financial lives.  TaxAct is an affordable digital tax preparation solution for individuals, business owners and tax professionals.  HD Vest Financial Services ® supports an independent network of tax professionals who provide comprehensive financial planning solutions.  For more information on Blucora or its businesses, please 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; 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 comply with laws and regulations, including, among others, those related to privacy protection and consumer data; our expectations concerning the benefits that may be derived from our new clearing platform and 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 companies or assets that we 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 release.  The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this release, except as may be required by applicable law.


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

  Three months ended December 31,   Years ended December 31,
  2018   2017   2018   2017
Revenue:              
Wealth management services revenue $ 97,190     $ 93,848     $ 373,174     $ 348,620  
Tax preparation services revenue 4,068     4,001     187,282     160,937  
Total revenue 101,258     97,849     560,456     509,557  
Operating expenses:              
Cost of revenue:              
Wealth management services cost of revenue 66,054     63,415     253,580     235,859  
Tax preparation services cost of revenue 1,858     2,475     10,040     10,018  
Amortization of acquired technology     50     99     195  
    Total cost of revenue (1) 67,912     65,940     263,719     246,072  
Engineering and technology (1) 5,107     5,573     19,332     19,614  
Sales and marketing (1) 16,642     17,824     111,361     102,798  
General and administrative (1) 16,229     13,263     60,124     52,668  
Depreciation 762     780     4,468     3,460  
Amortization of other acquired intangible assets 8,103     8,615     33,487     33,807  
Restructuring (1) (3 )   375     288     3,101  
    Total operating expenses 114,752     112,370     492,779     461,520  
Operating income (loss) (13,494 )   (14,521 )   67,677     48,037  
Other loss, net (2) (3,947 )   (5,402 )   (15,797 )   (44,551 )
Income (loss) before income taxes (17,441 )   (19,923 )   51,880     3,486  
Income tax benefit 1,741     31,842     (311 )   25,890  
Net income (loss) (15,700 )   11,919     51,569     29,376  
Net income attributable to noncontrolling interests (281 )   (1,871 )   (935 )   (2,337 )
Net income (loss) attributable to Blucora, Inc. $ (15,981 )   $ 10,048     $ 50,634     $ 27,039  
Net income (loss) per share attributable to Blucora, Inc.:              
Basic $ (0.38 )   $ 0.22     $ 0.94     $ 0.61  
Dilued $ (0.38 )   $ 0.21     $ 0.90     $ 0.57  
Weighted average shares outstanding:              
Basic 48,002     46,231     47,394     44,370  
Diluted 48,002     48,406     49,381     47,211  


(1) Stock-based compensation expense was allocated among the following captions (in thousands):
  Three months ended December 31,   Years ended December 31,
  2018   2017   2018   2017
Cost of revenue $ 527     $ 228     $ 1,467     $ 774  
Engineering and technology 176     250     766     984  
Sales and marketing 589     575     2,424     2,376  
General and administrative 2,402     2,166     8,596     7,519  
Restructuring     70         1,148  
Total stock-based compensation expense $ 3,694     $ 3,289     $ 13,253     $ 12,801  


(2) Other loss, net consisted of the following (in thousands):
  Three months ended December 31,   Years ended December 31,
  2018   2017   2018   2017
Interest income $ (132 )   $ (34 )   $ (349 )   $ (110 )
Interest expense 3,838     4,465     15,610     21,211  
Amortization of debt issuance costs 174     198     833     1,089  
Accretion of debt discounts 38     54     163     1,947  
Loss on debt extinguishment and modification expense     681     1,534     20,445  
Other 29     38     (1,994 )   (31 )
Other loss, net $ 3,947     $ 5,402     $ 15,797     $ 44,551  
                               



Blucora, Inc.
Preliminary Condensed Consolidated Balance Sheets
(Unaudited)
(Amounts in thousands)

  December 31,
  2018   2017
ASSETS      
Current assets:      
Cash and cash equivalents $ 84,524     $ 59,965  
Cash segregated under federal or other regulations 842     1,371  
Accounts receivable, net of allowance 14,977     10,694  
Commissions receivable 15,562     16,822  
Other receivables 7,408     3,180  
Prepaid expenses and other current assets, net 7,755     7,365  
Total current assets 131,068     99,397  
Long-term assets:      
Property and equipment, net 12,389     9,831  
Goodwill, net 548,685     549,037  
Other intangible assets, net 294,603     328,205  
Other long-term assets 10,980     15,201  
Total long-term assets 866,657     902,274  
Total assets $ 997,725     $ 1,001,671  
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable $ 3,798     $ 4,413  
Commissions and advisory fees payable 15,199     17,813  
Accrued expenses and other current liabilities 19,026     19,577  
Deferred revenue 10,257     9,953  
Total current liabilities 48,280     51,756  
Long-term liabilities:      
Long-term debt, net 260,390     338,081  
Deferred tax liability, net 40,394     43,433  
Deferred revenue 8,581     804  
Other long-term liabilities 7,540     8,177  
Total long-term liabilities 316,905     390,495  
Total liabilities 365,185     442,251  
       
Redeemable noncontrolling interests 24,945     18,033  
       
Stockholders’ equity:      
Common stock 5     5  
Additional paid-in capital 1,569,725     1,555,560  
Accumulated deficit (961,689 )   (1,014,174 )
Accumulated other comprehensive loss (446 )   (4 )
Total stockholders’ equity 607,595     541,387  
Total liabilities and stockholders’ equity $ 997,725     $ 1,001,671  
               


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

  Years ended December 31,
  2018   2017
Operating Activities:      
Net income $ 51,569     $ 29,376  
Adjustments to reconcile net income to net cash from operating activities:      
Stock-based compensation 13,253     11,653  
Depreciation and amortization of acquired intangible assets 38,590     38,139  
Restructuring (non-cash)     1,569  
Deferred income taxes (3,039 )   (16,159 )
Amortization of premium on investments, net, and debt issuance costs 833     1,099  
Accretion of debt discounts 163     1,947  
Loss on debt extinguishment 1,534     20,445  
Other 72     30  
Cash provided (used) by changes in operating assets and liabilities:      
Accounts receivable (4,286 )   (483 )
Commissions receivable 1,260     (678 )
Other receivables (3,851 )   (204 )
Prepaid expenses and other current assets (815 )   (869 )
Other long-term assets 3,450     (12,281 )
Accounts payable (615 )   (123 )
Commissions and advisory fees payable (2,614 )   1,226  
Deferred revenue 9,930     (3,248 )
Accrued expenses and other current and long-term liabilities 114     1,407  
    Net cash provided by operating activities 105,548     72,846  
Investing Activities:      
Purchases of property and equipment (7,633 )   (5,039 )
Proceeds from sales of investments     249  
Proceeds from maturities of investments     7,252  
Purchases of investments     (409 )
    Net cash provided (used) by investing activities (7,633 )   2,053  
Financing Activities:      
Proceeds from credit facilities     365,836  
Payments on convertible notes     (172,827 )
Payments on credit facilities (80,000 )   (290,000 )
Repayment of note payable with related party     (3,200 )
Proceeds from stock option exercises 12,773     40,271  
Proceeds from issuance of stock through employee stock purchase plan 2,100     1,429  
Tax payments from shares withheld for equity awards (8,362 )   (9,095 )
Contingent consideration payments for business acquisition (1,315 )   (946 )
Other     (30 )
    Net cash provided by financing activities (74,804 )   (68,562 )
Net cash provided by continuing operations 23,111     6,337  
       
Net cash provided by investing activities from discontinued operations     1,028  
Net cash provided by discontinued operations     1,028  
       
Effect of exchange rate changes on cash and cash equivalents (56 )   78  
Net increase (decrease) in cash, cash equivalents, and restricted cash 23,055     7,443  
Cash and cash equivalents, beginning of period 62,311     54,868  
Cash and cash equivalents, end of period $ 85,366     $ 62,311  
               


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

  Three months ended December 31,   Years ended December 31,
  2018   2017   2018   2017
Revenue:              
Wealth Management (1) $ 97,190     $ 93,848     $ 373,174     $ 348,620  
Tax Preparation (1) 4,068     4,001     187,282     160,937  
Total revenue 101,258     97,849     560,456     509,557  
Operating income (loss):              
Wealth Management 14,133     14,232     53,053     50,916  
Tax Preparation (8,742 )   (10,489 )   87,249     72,921  
Corporate-level activity (2) (18,885 )   (18,264 )   (72,625 )   (75,800 )
Total operating income (loss) (13,494 )   (14,521 )   67,677     48,037  
Other loss, net (3,947 )   (5,402 )   (15,797 )   (44,551 )
Income tax benefit (expense) 1,741     31,842     (311 )   25,890  
Net income (loss) $ (15,700 )   $ 11,919     $ 51,569     $ 29,376  


(1) Revenues by major category within each segment are presented below (in thousands):
  Three months ended December 31,   Years ended December 31,
  2018   2017   2018   2017
Wealth Management:              
Commission $ 39,932     $ 43,060     $ 164,201     $ 160,241  
Advisory 43,551     38,616     164,353     145,694  
Asset-based 9,999     7,021     31,456     26,297  
Transaction and fee 3,708     5,151     13,164     16,388  
Total Wealth Management revenue $ 97,190     $ 93,848     $ 373,174     $ 348,620  
Tax Preparation:              
Consumer $ 3,912     $ 3,844     $ 172,207     $ 147,084  
Professional 156     157     15,075     13,853  
Total Tax Preparation revenue $ 4,068     $ 4,001     $ 187,282     $ 160,937  


(2) Corporate-level activity included the following (in thousands):
  Three months ended December 31,   Years ended December 31,
  2018   2017   2018   2017
Operating expenses $ 6,143     $ 5,084     $ 20,494     $ 22,907  
Stock-based compensation 3,694     3,219     13,253     11,653  
Depreciation 947     921     5,003     4,137  
Amortization of acquired intangible assets 8,103     8,665     33,586     34,002  
Restructuring (3 )   375     288     3,101  
Total corporate-level activity $ 18,884     $ 18,264     $ 72,624     $ 75,800  
                               


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

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

  Three months ended December 31,   Years ended December 31,
  2018   2017   2018   2017
Net income (loss) attributable to Blucora, Inc. $ (15,981 )   $ 10,048     $ 50,634     $ 27,039  
Stock-based compensation 3,694     3,219     13,253     11,653  
Depreciation and amortization of acquired intangible assets 9,050     9,586     38,590     38,139  
Restructuring (3 )   375     288     3,101  
Other loss, net 3,947     5,402     15,797     44,551  
Net income attributable to noncontrolling interests 281     1,871     935     2,337  
Income tax expense (benefit) (1,741 )   (31,842 )   311     (25,890 )
Adjusted EBITDA $ (753 )   $ (1,341 )   $ 119,808     $ 100,930  
                               


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

  Three months ended December 31,   Years ended December 31,
  2018   2017   2018   2017
Net income (loss) attributable to Blucora, Inc.(2) $ (15,981 )   $ 10,048     $ 50,634     $ 27,039  
Stock-based compensation 3,694     3,219     13,253     11,653  
Amortization of acquired intangible assets 8,103     8,665     33,586     34,002  
Accretion and write-off of debt discount and debt issuance costs on previous debt             17,875  
Restructuring (3 )   375     288     3,101  
Impact of noncontrolling interests 281     1,871     935     2,337  
Cash tax impact of adjustments to GAAP net income (536 )   3,328     (2,257 )   (6 )
Non-cash income tax benefit (1) (3,050 )   (33,178 )   (2,403 )   (26,853 )
Non-GAAP net income (loss) $ (7,492 )   $ (5,672 )   $ 94,036     $ 69,148  
               
Per diluted share:              
Net loss attributable to Blucora, Inc.(2) $ (0.38 )   $ 0.21     $ 0.90     $ 0.57  
Stock-based compensation 0.08     0.07     0.27     0.25  
Amortization of acquired intangible assets 0.15     0.20     0.68     0.72  
Accretion and write-off of debt discount and debt issuance costs on previous debt             0.37  
Restructuring     0.01     0.01     0.07  
Impacts of noncontrolling interests 0.06     0.04     0.14     0.05  
Cash tax impact of adjustments to GAAP net income (0.01 )   0.07     (0.05 )   0.00  
Non-cash income tax benefit (0.06 )   (0.72 )   (0.05 )   (0.57 )
Non-GAAP net income (loss) $ (0.16 )   $ (0.12 )   $ 1.90     $ 1.46  
Weighted average shares outstanding used in computing per diluted share amounts 48,002     46,231     49,381     47,211  
                       


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

  Ranges for the three months ending
  March 31, 2019
  Low   High
Net income (loss) attributable to Blucora, Inc. $ 48,000     $ 50,500  
Stock-based compensation 4,300     3,900  
Depreciation and amortization of acquired intangible assets 9,400     9,300  
Other loss, net (3) 5,300     5,000  
Income tax expense 1,500     3,800  
Adjusted EBITDA $ 68,500     $ 72,500  
               


Preliminary Non-GAAP Income Reconciliation for Forward-Looking Guidance (1)
(Amounts in thousands)

  Ranges for the three months ending
  March 31, 2019
  Low   High
Net income (loss) attributable to Blucora, Inc. $ 48,000     $ 50,500  
Stock-based compensation 4,300     3,900  
Amortization of acquired intangible assets 8,100     8,100  
Cash tax impact of adjustments to net income (loss) (500 )   (500 )
Non-cash income tax expense 100     1,500  
Non-GAAP income $ 60,000     $ 63,500  
               


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 and income tax (benefit) expense. For purposes of this definition, restructuring costs relate to the relocation of our corporate headquarters during 2017.

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, accelerated accretion of debt discount on our Convertible Senior Notes that were outstanding for a portion of 2017 (the "Notes"), write-off of debt discount and debt issuance costs on the terminated Notes and the terminated TaxAct - HD Vest 2015 credit facility, 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.  The write-off of debt discount and debt issuance costs on the terminated Notes and the closed TaxAct - HD Vest 2015 credit facility relates to the debt refinancing that occurred in the second quarter of 2017. 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 (loss) income 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 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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