infospace logo2SS Holdings, the company that owned the TaxAct software line, was an extremely profitable operation that paid its owners large dividends. And perhaps that explains why after the courts blocked its sale to H&R Block, the company was quickly snapped up by InfoSpace in January. For the year ended September 30, the company had operating margins of 43.6 percent and that was down from more than 49 percent for each of the prior fiscal years.

The financial reports for 2SS were reported this week by InfoSpace in a filing with the SEC. Pro forma results were also filed for the combined operations. InfoSpace had reported revenue and EBITDA for 2SS in a presentation at the time the deal was announced, but had not revealed detailed financial information.

For fiscal 2011, 2SS had just over $26 million in net income, a 21.7-percent increase from $21.4 million for 2010. Revenue for the most recently completed year was $77.6 million, a rise of 10.9 percent from just under $70 million the prior year. Revenue came overwhelmingly from services which were $69.4 million for 2011 and just under $62 million for 2010. The remainder of revenue came from product sales.

In both 2009 and 2010, 2SS paid out more in dividends than it earned in net income with the company still able to improve its cash position because of cash generated by operations. In 2009, the company earned $19.4 million and paid $22.5 million in dividends while it distributed $23.4 million in 2010. Last year's dividend payment of $21.6 million was less than net income.


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