Intuit also announced today that it will acquire Lacerte Software, a Dallas-based developer of professional tax preparation software, for $400 million in cash. To fund the acquisition, Intuit filed to sell 8.4 million shares in a secondary offering, which will generate about $378 million, excluding costs of the offering and based on today's closing price of $45.
Intuit's revenues rose to $142 million, from $136.3 million, during the comparable 1997 quarter. Third-quarter pro forma net income was $10.2 million, up 58 percent from the prior year.
The company reported a third-quarter net loss of $2.2 million, or 5 cents a share, including an accounting charge of $16.2 million for a three-year agreement with America Online.
The Lacerte acquisition gives Intuit, which already had its own Pro Series software for professional tax preparers, two product lines with less than 30 percent of the professional taxware market, said Larry Wolfe, senior vice president of Intuit's tax products division.
"This will enable us to offer a choice between two excellent products," Wolfe said. The Lacerte operation, with about 320 employees, will be operated for the foreseeable future in Dallas as a wholly owned subsidiary.
Intuit expects to make a regulatory filing because of potential antitrust issues that might arise from the acquisition, but Wolfe noted that two larger players, multibillion-dollar firms Research Institute of America and Commerce Clearinghouse, have professional tax software products on the market as well, indicating that competition for Intuit's products is viable.
Intuit said the number of electronic tax filings increased 143 percent from last year, to 650,000 returns. Wolfe said TurboTax Online, which allowed tax filers with simple returns to do them from Intuit's Web site, was well-received, but he declined to offer specific numbers. Next year, Intuit expects to offer capabilities for all federal and state tax returns online.