Avantax Inc (AVTA) 2015 Q4 法說會逐字稿

Good day, ladies and gentlemen, and thank you for your patience. You have joined the Q4 2015 Blucora earnings conference call. At this time all participants are in a listen only mode. Later we will conduct a question and answer session and instructions will be given at that time. Should you require any additional assistance during the call, please press * then zero on your touchtone telephone. As a reminder, this conference may be recorded. I would now like to turn the call over to your host, the VP of Investor Relations, Ms. Stacy Ybarra. Ma'am, you may begin.

Good afternoon, and welcome to Blucora's investor conference call to discuss the fourth quarter and full year's 2015 results. Before we begin, I'd like to remind you that during the course of this call Blucora representatives will make forward-looking statements, including but not limited to statements regarding Blucora's expectations about its products and services, outlooks for the future of our business and growth initiatives, and anticipated financial performance for the first quarter and full year 2016.

Other statements that refer to our beliefs, plans, expectations or intentions which may be made in response to questions are also forward-looking statements for purposes of the Safe Harbor provided by the Private Securities Litigation Reform Act. Because these statements pertain to future events, they are subject to various risks and uncertainties, and actual results could differ materially from our current expectations and beliefs. Factors that could cause or contribute to such differences include, but are not limited to, the risks and other factors discussed in Blucora's most recent quarterly report on Form 10-Q on file with the Securities and Exchange Commission. Blucora assumes no obligation to update any forward-looking statement, which speak only as of the date the statement is made.

In addition during this call, our management will discuss GAAP and non-GAAP financial measures. In the press release, which has been posted on our website and filed with the SEC on Form 8-K, we present GAAP and non-GAAP results along with reconciliation tables, and the reasons for our presentation of non-GAAP information. We have also provided supplemental financial information to our results in the Investor Relations section of our corporate website at www.blucora.com, and filed with the SEC on Form 8-K.

Now I'll turn the call over to Bill Ruckelshaus. Following his comments, Eric Emans will review fourth quarter and full year 2015 results and 2016 outlook, then we'll open up the call to your questions. Bill?

Thank you, Stacy. To those on the call, good afternoon and thank you for joining us. 2015 marked an important and transformational year for Blucora. In my opening remarks I want to briefly recap our strategy, update on the execution steps remaining to complete the transactional phase of our transformation, and provide further insights on the opportunities within and between HD Vest and TaxACT. Let me start by providing some perspective on where we've been and how we've arrived at where we are now.

Blucora's multi-stage transformation began in 2010. In stage one we pursued a deliberate strategy with a central objective, to allocate capital to acquisitions that bring needed diversity and improve the overall quality of our businesses and financial results. In this effort, we brought to bear a large net operating loss that increases free cash flow conversion of businesses we own. The second stage, where we soon embark, involves organizing around our strongest assets and becoming more operationally focused.

In executing stage one our first step came in early 2012 with TaxACT, purchased for roughly $290 million. TaxACT has performed well. Revenue, EBITDA and unlevered free cash flow have all grown at annual rates in excess of 10% since 2011, the year before our acquisition. TaxACT's performance reflects the strengths of the team, balanced growth in consumer e-files and ARPU, and expanding paid professional software and SMB business line. Subsequent smaller acquisitions of Monoprice in mid-2013, and How Stuff Works in early 2014, contributed to the further diversification of Blucora, though in both cases returns on incremental capital versus TaxACT have proven less attractive.

Our acquisition late last year of HD Vest, and our decision to divest InfoSpace and Monoprice, now position Blucora to begin stage two of the company's transformation. HD Vest is the largest US independent broker dealer focused on tax professionals. Pairing HD Vest with TaxACT creates a compelling new Blucora, industry leading franchises across financial advisory and tax preparation sectors; a strong financial profile through stable, predictable and recurring free cash flow; and strategic opportunities to cross sell solutions to common customers across both businesses. Importantly, Blucora now anticipates full utilization of our tax advantages, generating approximately $160 million in future cash savings for shareholders.

Our work isn't done, but the path is clear. In the coming months our agenda is straightforward: complete the divestitures of InfoSpace and Monoprice; streamline corporate operating expenses; and introduce our new CEO to guide Blucora in the next phase of growth and development. During this period we will also execute our operational plans and integrate HD Vest. Upon completion of the divestitures, we will allocate at least 50 of sale proceeds to paying down debt. Beginning in 2017, we plan to begin returning capital to shareholders.

Shortly I will turn the call over to Eric for more details on the financials, but first I'd like to provide an update on HD Vest and TaxACT, and touch briefly on the path forward, starting with wealth management.

Despite a challenging market environment in the second half, HD Vest performed well in 2015. Highlights include: revenue of $319.7 million, up 5% over 2014; segment income of $43 million, up 7% year-over-year; segment margin of 13.4%, up 22 basis points versus 2014; and ending total assets under administration of $36.6 billion, and advisory assets under management of $9.7 billion.

HD Vest operates in a large and growing segment of the financial advice industry supported by documented secular trends, including a growing percentage of the US population at or nearing retirement; increasing adoption of financial advisers to plan for retirement and manage wealth; gaining share of independent advisers not aligned with traditional wirehouse firms; and a corresponding growth in asset flows to independents. The HD Vest strategy is to be the premier provider of financial services to tax professionals, engaging ethical, trusted CPAs as financial advisers delivering holistic advice to clients seeking financial security.

Going forward, execution of this strategy is a function of three key initiatives. One, attract, grown and retain advisers through recruitment and training. Two, deliver technology solutions to drive adviser productivity and fee-based advisory solutions. And three, manage regulatory and compliance burdens cost effective.

In 2015 HD Vest added the greatest number of new advisers than at any point in the last eight years. Total advisers were up, marking the third consecutive year of positive adviser growth. Adviser recruitment was reinvented in 2014 with enhanced lead generation, simplified application and onboarding, and improved brand awareness. Extensive formalized training and succession planning programs help retain new and long tenured advisers and drive long-term value.

HD Vest is now partnering with TaxACT and ProAdvance, TaxACT's paid professional marketplace. So far we have seen good leads from TaxACT to HD Vest, with a nice conversion rate.

Technology forms the cornerstone of HD Vest's growth strategy. New advisory inflows in 2015 reached the second highest level in company history. The technology behind HD Vest V4 Client Experience is driving this momentum. Let me provide two examples.

1040 Analyst provides automated analysis of form 1040s, creating highly effective adviser/client planning conversations about opportunities identified in tax returns. Since inception, advisers utilizing 1040 Analyst have acquired approximately 2,300 new clients with $200 million in new assets. Including assets captured from existing clients, 1040 Analyst is responsible for $440 million in new assets to the firm.

VestVision is an investment and retiring planning tool facilitating client personalized plan that track to individual goals in all market conditions. Since launch in 2014, over 8,600 plans have been created with VestVision, representing 10% of all client assets now held at HD Vest. Some $3.5 billion in held-away client assets are targeted for asset capture in the future.

These and other technology enabled components of the V4 Client Experience provide robust client workflow tools, enabling HD Vest advisers to grow their practices through individualized client insights and custom planning and investment solution. HD Vest technology delivered in training venues and supported by experienced home office team members enhances adviser confidence and competence, and drives adviser productivity.

Last, HD Vest operates in a dynamic regulatory environment. We plan expenses to fund current and future expected compliance, including the upcoming DOL rule. We expect a final DOL rule within the next 60 to 90 days, although the implementation deadlines are expected later in the year or beyond. If the rule is adopted as proposed, we see the most significant impact in disclosure requirements to clients with smaller IRA investment, resulting in additional annual cost estimated to be approximately $200,000.

From a materiality perspective, impacted smaller accounts represent approximately 2% of total assets under administration, or $500,000 in equivalent company gross profit. We can mitigate a portion of the rule's impact by lowering account minimums and shifting balances to advisory account. Overall, we do not expect the impact of the DOL rule, as proposed, to be material to our financial performance, and we are working to best operationalize the new rule once finalized.

Now moving to tax preparation. The tax season is underway, and thus far playing out as expected. This off season TaxACT responded with new forms based packages and refreshed branding, featuring a free state, free federal offering for a simple return. Additional packages for more complicated returns are better tailored to the unique situations of our DIY filers. Priced at a fraction of the cost of similar online tax products, our offerings include mobile responsive design, enhanced account management, refund snapshots, expanded security, identity recovery services, and as always, a price lock guarantee.

TaxACT also offers a preparer's edition of its tax software to more than 19,500 tax professionals. This year improvements to product workflows allow completion of more client returns in less time with tools and enhancements including: dedicated customer support; enhanced reporting; secure document exchange through a new online portal; identity protection services; and additional state additions. TaxACT also launched ProAdvance, a new online resource designed to help tax professionals boost productivity and grow their businesses. These enhancements are being well received by our professionals, and early trends in customers and revenue growth are positive.

The TaxACT value proposition, centered on fairness, simplicity, transparency and accuracy, remains the strongest in the industry at all levels of complexity. Our enhancements this season will strengthen our ability to offer filers and paid professionals the best deal in tax. While it's early in the season, we are pleased with the results thus far.

Let me touch briefly on shared opportunities between HD Vest and TaxACT. We continue to believe the combination of HD Vest and TaxACT brings opportunity to unlock synergy in two key areas: bringing financial planning and wealth management solutions to TaxACT customers; and introducing TaxACT professional customers to HD Vest. We are testing this season with TaxACT customers to help inform our implementation next year. Early receptivity tests are encouraging and confirming of ingoing assumptions.

On the paid professional side, as mentioned, HD Vest is now partnering with TaxACT in their CPA marketplace. We are seeing strong interest from TaxACT professionals in learning more about HD Vest, aided by a hosted webinar including HD Vest and featuring a co-branded free trial of the 1040 Analyst solution. TaxACT professionals are proving engaged and open to new solutions to grow their practices.

I'll wrap up with some comments on the remaining execution steps in our transformation. The divestiture processes for InfoSpace and Monoprice are moving according to schedule. We hope to conclude both processes sometime in the middle of the year. We're seeing strong interest from both strategic and financial buyers, and are optimistic in each case that we will identify new owners in transactions that both maximize our cash flow and provide new opportunities for our team.

Both businesses performed well in the fourth quarter. I'll share a few brief highlights. Search and content revenue and segment income grew versus the third quarter, representing the first sequential increase in two years. Bing is now fully implemented across the search network, bringing added monetization and substantially reducing reliance on Google and Yahoo. At How Stuff Works we continue to make progress with the publishing and revenue optimization platform launched in October. The new platform is driving ROI positive traffic from non-search channels, doubling our rate of revenue and growing page use 4X. The How Stuff Works podcasts continue to shine and experience record downloads in Q4.

Monoprice revenue grew 7% year-over-year in the fourth quarter, and generated double digit revenue growth during the holiday season, well outpacing the overall consumer electronics market. Cyber Monday revenue was up 17% over 2014. KPIs are trending up in key categories. Site optimization initiatives are proving out. Visits converted at a higher rate with a 12% decrease in bounce rate and a 15% increase in average order value. Our new Kentucky warehouse was running this holiday season, allowing for more competitive shipping and driving a 5% lift in east coast sales. Product innovation, a key focus of the team, resulted in the highest quarterly revenue from new products in the company's 13-year history.

To sum up our progress, our transition to a technology enabled financial solutions company is underway, and the remaining execution steps are on track. The new CEO search is progressing well, and a short list of qualified candidates is undergoing board evaluation. I am particularly pleased at the quality of candidates we are seeing.

HD Vest and TaxACT are high quality businesses with significant shared opportunity. Together they represent important characteristics and combine potential for the new Blucora: strong secular trends driving large market opportunities; established leaders with defensible market position, sustained growth profiles; sticky, recurring and predictable revenue model; complementary and diversified sources of revenue; experienced and tenured senior leadership teams.

With that, I'll turn the call over to Eric for more details on the financials.

Thanks, Bill. It was a busy fourth quarter. We closed the acquisition of HD Vest on December 31st, 2015, and announced our plans to divest our InfoSpace and Monoprice businesses. These events have triggered significant changes in the way we report financial results from our last call. Most notably, our search and content and e-commerce segments are now reported as discontinued operations, leaving tax prep as the lone business segment in continuing operations.

I will touch quickly on our reported results, but I will spend the majority of my prepared remarks focused on pro forma results that include HD Vest as we believe this presentation more accurately reflects the financial performance of the company on a go forward basis. Please note that the results of HD Vest will be reported as our wealth management segment.

Before we begin, I want to again call your attention to the supplemental financial information we have posted to the Blucora IR site. We believe this information, which includes several schedules that recast historical reported and pro forma results will be very helpful to investors.

Beginning with our reported results for 2015, revenue was $117.7 million, and adjusted EBITDA was $39.2 million, up 13% and 11% respectively versus prior year. Non-GAAP net income from continuing operations was $28.2 million, up 21% year-on-year, and $0.67 per diluted share. Adjusted EBITDA and non-GAAP income from continuing operations include add backs for HD Vest related transaction expenses and expenses associated with our previously announced CEO transition. GAAP loss from continuing operations was $12.7 million, or $0.31 per share. GAAP net loss for the year was $40.1 million, or $0.98 per share, and includes a loss from discontinued operations of $27.3 million, or $0.67 per share.

As of December 31st, 2015, our balance sheet reflects the HD Vest acquisition including net debt of $540.9 million. As of yearend our net leverage ratio was 4.6 times when giving credit for the segment income of our discontinued operations, as well as taking into account cash and debt associated with discontinued operations. As Bill mentioned, we are committed to paying down debt in 2016, and we expect to achieve net leverage of three times in early 2017. To this end, in the first quarter of 2016 we expect to pay down $30 million of our term B credit facility utilizing cash from operations.

Let's move on to a discussion of pro forma results for full year and fourth quarter 2015. On a consolidated basis, pro forma revenue for 2015 was $437.4 million, and adjusted EBITDA was $82.2 million. Non-GAAP income from continuing operations was $37 million, or $0.88 per diluted share. Pro forma GAAP loss from continuing operations for the year was $11.5 million, or $0.28 per share, driven by acquired intangible amortization associated with the HD Vest acquisition. Consolidated pro forma revenue for the fourth quarter was $85 million, and adjusted EBITDA was $3.5 million.

Non-GAAP loss from continuing operations was $8 million, or $0.19 per share. The loss reflects increased interest expenses associated with the term B credit facility. Pro forma and GAAP loss from continuing operations for the quarter was $13.9 million, or $0.34 per share, and includes acquired intangibles amortization associated with the HD Vest acquisition.

Turning to the pro forma segment performance and expectations for the first quarter of 2016 starting with tax prep. Full year tax prep revenue was $117.7 million, and segment income was $57 million. Revenue was up 13% and segment income was up 15% versus the prior year, and segment margin was 48%, a great year. Fourth quarter 2015 tax prep revenue was $2.9 million, and segment loss was $4.5 million, both better than expectation.

Looking ahead for tax prep, we are confirming our first half 2016 revenue and margin guidance. We expect revenue of $122 million to $125 million, and a margin of 55% to 56%. We expect approximately 70% of the first half revenue will come in during the first quarter at a margin of approximately 52%. This represents a shift in revenue and profitability to the second quarter when compared to last year, driven in large part by our pricing and packaging changes, which we expect to drive higher ARPO in the second peak.

Moving on to wealth management. Full year 2015 pro forma revenue was $319.7 million. The segment income was $43 million, up 5% and 7% respectively versus 2014. Revenue growth was driven primarily by an 8% increase in advisory revenue, which benefited from strong net flows for the third quarter 2014 through the first quarter 2015, as well as a favorable S&P bump entering the year. Overall advisory AUM was up 1% for 2015 as approximately 45% of net flows were offset by market decline. Commission revenue was up 3% driven by a 4% increase in transactional revenue, which exited the year strong and trailers were up 2%. Total recurring revenue for the year was approximately 78%. Net revenue was up 3% as adviser payout increased 45 basis points. Segment income growth and margin expansion were driven by net revenue growth and increased operating leverage through expense management. Operating expenses were up less than 1% year-on-year.

For the fourth quarter, pro forma wealth management revenue was $82.1 million, and segment income was $12.2 million, up 4% and 18% respectively year-on-year. Revenue growth was driven by a 6% increase in commission revenue as transactional revenue was up 14% while trailers were flat year-on-year. Advisory revenue was also flat year-on-year, attributable the S&P being down 7% sequentially exiting the third quarter.

Net revenue was up 3% as adviser payout increased 75 basis points versus the fourth quarter of 2014 attributable to revenue and adviser mix, which was partially offset by growth in attachment revenue. It is worth noting that exiting 2015 we saw an increase in sweep revenue attributable to the fed interest rate action and an increase in our cash free balance related to market volatility. Segment margin expanded to 15% primarily driven by operating leverage in the business, as operating costs were down 8% year-on-year as the team focused on profitability in the back half of 2015.

Looking ahead to the first quarter 2016, we expect revenue of $77 million to $79 million at a segment margin of 13% to 14%.

Switching gears to pro forma unallocated corporate operating expenses, full year 2015 was $17.8 million, and fourth quarter was $4.3 million. These pro forma numbers exclude transaction expenses and CEO transition costs, as well as any cost specifically identifiable to discontinued operation. Consistent with our comments in October, we expect our strategic transformation will allow us to reduce unallocated corporate operating expenses with an anticipated achievement of a $12 million run rate in early 2017.

With that being said, 2016 will be a year of transition as we the divest InfoSpace and Monoprice businesses and integrate HD Vest. As a result, we will incur costs to support this transition throughout 2016. In general, transition costs fall into two categories. First are one-time costs incremental to our 2015 cost base, like HD Vest integration costs. The second category are costs needed to support us through this transition, and for the most part are expected to decline throughout the year. To this end we are expecting unallocated operating expenses will be just north of $5 million in the first quarter of 2016. For the full year we expect unallocated costs to be approximately $18.5 million.

With that, let's summarize our first quarter 2016 outlook for continuing operation. For the first quarter, we expect consolidated revenue between $162.5 and $167 million. Adjusted EBITDA between $49 million and $52 million. Non-GAAP income from continuing operations of $36.7 million to $39.9 million, or $0.88 to $0.96 per diluted share. And GAAP income from continuing operations of $14.4 million to $16.6 million, or $0.35 to $0.40 per diluted share.

In addition to first quarter outlook, we are providing full year outlook for continuing operations on a consolidated basis. This is a departure from our past practice, but appropriate in light of our strategic transformation and the stability of our continuing operations. For the full year we expect consolidated revenue between $444 million and $462.5 million. Adjusted EBITDA between $86 million and $91.5 million. Non-GAAP income from continuing operations of $40.6 million to $47.5 million, or $0.96 to $1.12 per diluted share. And GAAP loss from continuing operations of $7.5 million to $2.2 million, or $0.18 to $0.05 per share.

With that, let's turn the call over to the operator and we'll take your questions.

Thank you, sir. (Operator instructions). Thank you. Our first question comes from the line of Dan Kurnos of Benchmark. Your line is open.

Great, thanks. Good afternoon, guys. Three questions from me. First, just on the divestitures, I guess we'll start with that. Obviously the market has not been very favorable, to say the least, to anybody in the front half, or front quarter of this year. You know, we've seen a lot of players in the search space continue to struggle. Obviously [IC] went through a reset, Perion bought Undertone and they're persisting, you know they don't have any cash really anymore. So just curious how you're thinking about -- I know you said sales are still on plan to be accomplished by the first half of this year, maybe a little bit longer than we all expected. But just in this marketplace, do you still think you can recognize a fair value for the assets you're trying to divest?

Hey, Dan, it's Bill. Yeah, no I think the, you know consistent with our update in the upfront remarks, the divestiture processes, both with InfoSpace and Monoprice, are going as we had expected. We're still planning on completing both processes in the middle of the year. As to the impact on either process of the market and the choppiness, we're not seeing it. These are assets that are pretty well known to the group of buyers that we're approaching, and that includes both financial buyers as well as strategic. And, you know, in each case you're going to have peculiarities around a business model or a particular industry, as you pointed some of those that relates to search, but the good news is the buyers that we're approaching are pretty well educated.

Okay. And then just, Bill, maybe, you know I know you talked in your prepared remarks about how you see kind of the integration and synergy process occurring over the balance of the year. You've had HD Vest for a whole whopping month now. You know, just curious, and now that you've gotten your hands dirty, if you can give us any more granularity on either cross pollination. Obviously you've talked about the record levels adviser adds, but just any further thoughts you can give us, additional color just as you have now -- you know now that you have the asset in your possession, as it relates to synergies and opportunity there?

Yeah, so I think that, as we had stated when we made our announcements last year, we do feel like there are fantastic opportunities to promote advisory solutions to TaxACT customers, both DIY consumers as well as paid professionals. Not all of the TaxACT customers, consumers or professionals, will be a good fit, maybe not even a majority. But we do know from the name files, on both sides of the business, that there are segments of TaxACT customers where the fit is really strong, you know consumers for whom an introduction to and HD Vest adviser to help them plan, save and invest would be very well received. And likewise tax professionals looking to augment their practices with financial advisory sources for clients.

One thing to point out, and why we find this model and the combination potential so interesting, is really two things. One is the added monetization potential with TaxACT customers. So the HD Vest model is extremely profitable on a per-client basis, consumer basis. Revenue is approaching about $900 and net revenue is roughly $280. At these levels you don't have to make heroic adoption assumptions to see your way to or beyond the synergy number we provided last year. And on the paid professional side, you can do the same math, or arrive at the same conclusions.

So this season, in the tax season we're testing two things. One is trying to get a better handle through in application questionnaires and surveys and interactions with clients the solution requirements, which is what are their pain points and what wealth management products might have the greatest resonance for them in the future. And also receptivity, which is how would our filers react to the prospect of speaking on the phone or receiving email information about wealth management options through HD Vest. So we're going to come away from this season with a lot more information and I think be able to hit the ground running next season.

Great. And then just the last one for me. Eric, just I'm trying to reconcile the pro forma 2016 guidance with what you gave back after the HD Vest acquisition here. And one of two things, unless I'm making a mistake which is entirely possible, it's been a long earnings season, but one of two things just doesn't seem to fit here. Either TaxACT is going to grow 10%, and at the low end that mean HD Vest revenue would be down 1.5% year-over-year in 2016. Or TaxACT is not [embedded] in your guidance, embedded to grow at that sort of 10% rate, which I think you know has been a pretty consistent target and HD Vest is still going to achieve its $334 million to $344 million number. So just can you help me sort of reconcile that? Is it market issues with HD Vest, the fact that the stock market's come down, or just what are the puts and takes there that get you to the guidance range for 2016? Thanks.

Yeah, Dan, this is Eric. So you know looking specifically at revenue, there is some softness versus what we communicated, and that is market driven. But, you know, and we're not going to get into specifically breaking those out, but the tax business is expected to perform to plan, and in a large part, you know, that can be seen by us reaffirming our first half guidance there where the majority of the revenue comes through.

I think that the thing to point out, and again why we really like the combination of these two businesses, and quite frankly why we have the confidence to put forth the full year guidance, which is something that we had not done before, is because -- and really around the profitability and the adjusted EBITDA that these businesses can drive, and that's what we like about both these businesses. And even though we are seeing some softness on the topline, we are still able to come in where we want to on the bottom line.

So yes, the market is playing a little bit with the topline, but I think, you know we've got a very experienced team that understands the operating leverage in their business, both teams do. But one of the things we like specifically about HD Vest was is, yes it is -- you know market is a factor. It isn't the only thing that drives that business, and there are a lot of things that are within their control. And they, you know as I talk to Roger a lot, you know what we focus on is the number of advisers times the assets equals the revenue. And they're very good at driving advisers. They're very good at helping those advisers retain and acquire those advisers, very good at having those guys grow their assets, which drives production.

And certainly market can play a factor into that, but that is not the primary driver in this business. So very pleased with where we are on the bottom line and we're certainly putting some of that sensitivity to the test right out of the gate here, but at this point we're confident in the asset's ability to perform in the markets and that's what we liked about it when we bought it.

Got it. Great. Thanks, guys. Appreciate it.

Thank you. (Operator instructions). Our next question comes from Michael Millman of Millman Research. Your question, please.

Thank you. Could you talk about the impact of the reduced tax refunds we're seeing this year on returns? And also give a little more color to your comment that the tax season is playing out as expected.

Yes so, Michael, I'll start off with the second part of your question. Look, the bottom line with TaxACT is the changes we made in the off season positioned TaxACT to be more competitive in the marketplace. And we're finding that to be the case and I think we're benefiting from those changes, allowing us to sort of recapture at all filer segments the best deal in tax. And certainly our comfort level in terms of reaffirming full season guidance should give you some indication as to why we think that is playing out the way it is.

Share impacts from our changes I think occur along two dimensions. The first season I think, and what we know is that we're going to be able to better retain existing TaxACT filers in 1040A and 1040EZ. We obviously place a big priority on retention and know that this is going to improve our stickiness with customers. And then over a multi-year basis, our packaging changes will result in higher aggregate ARPU, which will put us in a position of being able to reinvest those economics back into customer acquisition brand building, which I think is really going to be where the battle is waged and ultimately won from a share perspective.

Yeah, and as it relates to your first question, you know rather than speak specifically to any particular trend, I guess what I would say is, as we think about where we sit in the tax season, our plan and where we are you know with the price and packaging that Bill mentioned, is you know we're very confident in the financial performance that this business can put forth. And in the face of that change, and things are going, actually you know I would say at this point even a little better than what we expected.

You know as it relates to units and all the various market factors that can go into that I think, you know quite frankly that that market story is a little opaque to us right now. There's not a ton of information available and you know we'd assumed that the market was going to grow 2% to 4% and so our plan had that assumption in it and I would say we're trailing a little bit behind our plan right. But as respect to any specific trend, I think I would just leave my comments at that high level.

So do you have any idea as to why refunds are down so much?

Not at this time.

Okay. Thank you.

Thank you. And that does conclude our call for this afternoon. Thank you for your participation and have a wonderful day. You may disconnect your lines at this time.