H&R Block Announces Interim Tax Season Results
KANSAS CITY, Mo.--(BUSINESS WIRE)--March 16, 2006--H&R Block Inc. (NYSE: HRB) today reported tax season results for the interim period from Jan. 1 through Feb. 28, 2006.
Tax preparation and related fees increased 2.0 percent from the same period of 2005 to $1.5 billion, while the average fee per client served in the current year period rose 6.2 percent to $153.20. Total clients served (for both the company's retail operations and digital tax solutions business) was 12.1 million, a decline of 108,000, or 0.9 percent, from the prior year period. Strong second half of February growth in digital clients offset the company's January weak start to the filing season.
"After a disappointing January, we are meeting our expectations, with February results comparable to those in the prior year in our retail offices and digital tax solutions posting strong double-digit gains," said Mark A. Ernst, chairman and chief executive officer. "Though do-it-yourself taxpayers are turning to digital solutions, principally online, we don't see this as a shift from traditional paid professionals.
"There's a lot of tax season yet to come, and we look forward to serving millions more clients this month and through the end-of-season peak in April."
H&R Block plans to release additional interim tax season results for its U.S. tax operations before the NYSE market opening on March 30, April 18 and May 10.
About H&R Block
H&R Block Inc. (NYSE: HRB) is a leading provider of tax, financial, mortgage, accounting and business consulting services and products. H&R Block is the world's largest tax services provider, having prepared more than 400 million tax returns since 1955. The company and its subsidiaries generated revenues of $4.4 billion and net income of $636 million in fiscal year 2005 from operations in four principal business segments: tax preparation and advice via in-office, online and software solutions; investment and financial advisory services; retail and wholesale mortgage services; and tax/accounting/business consulting services for mid-sized businesses. Headquartered in Kansas City, Mo., H&R Block markets its services and products under three leading brands - H&R Block, Option One and RSM McGladrey. For more information visit our Online Press Center at www.hrblock.com.
Table follows
H&R BLOCK
Preliminary U.S. Tax Operating Data
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(in thousands, except average fee and number of offices)
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January February YTD
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1/1-1/31 2/1-2/15 2/16-2/28 Total 1/1-2/28
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Tax preparation &
related fees:
Fiscal year 2006
Company-owned
operations $379,959 $434,958 $192,062 $627,020 $1,006,979
Franchise
operations 191,610 204,713 83,693 288,406 480,016
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$571,569 $639,671 $275,755 $915,426 $1,486,995
====================================================
Fiscal year
2005 (1)
Company-owned
operations $367,294 $436,695 $185,136 $621,831 $989,125
Franchise
operations 183,556 202,669 82,292 284,961 468,517
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$550,850 $639,364 $267,428 $906,792 $1,457,642
====================================================
Percent change
Company-owned
operations 3.4% -0.4% 3.7% 0.8% 1.8%
Franchise
operations 4.4% 1.0% 1.7% 1.2% 2.5%
Total retail
operations 3.8% 0.0% 3.1% 1.0% 2.0%
Total clients
served:
Fiscal year
2006
Company-owned
operations 2,372 2,677 1,175 3,852 6,224
Franchise
operations 1,398 1,487 597 2,084 3,482
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Total retail
operations 3,770 4,164 1,772 5,936 9,706
Digital tax
solutions (2) 1,143 781 513 1,294 2,437
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4,913 4,945 2,285 7,230 12,143
====================================================
Fiscal year
2005 (1)
Company-owned
operations 2,450 2,874 1,219 4,093 6,543
Franchise
operations 1,403 1,544 616 2,160 3,563
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Total retail
operations 3,853 4,418 1,835 6,253 10,106
Digital tax
solutions (2) 1,129 694 322 1,016 2,145
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4,982 5,112 2,157 7,269 12,251
====================================================
Percent change
Company-owned
operations -3.2% -6.9% -3.6% -5.9% -4.9%
Franchise
operations -0.4% -3.7% -3.1% -3.5% -2.3%
Total retail
operations -2.2% -5.7% -3.4% -5.1% -4.0%
Digital tax
solutions (2) 1.2% 12.5% 59.3% 27.4% 13.6%
Total -1.4% -3.3% 5.9% -0.5% -0.9%
Total retail
day-to-day (3) -10.7% 0.3% -0.3% 0.1% -4.4%
Average fee per
client served: (4)
Fiscal year 2006
Company-owned
operations $160.19 $162.48 $163.46 $162.78 $161.79
Franchise
operations 137.06 137.67 140.19 138.39 137.86
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$151.61 $153.62 $155.62 $154.22 $153.20
====================================================
Fiscal year
2005 (1)
Company-owned
operations $149.92 $151.95 $151.88 $151.93 $151.17
Franchise
operations 130.83 131.26 133.59 131.93 131.50
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$142.97 $144.72 $145.74 $145.02 $144.24
====================================================
Percent change
Company-owned
operations 6.8% 6.9% 7.6% 7.1% 7.0%
Franchise
operations 4.8% 4.9% 4.9% 4.9% 4.8%
Total retail
operations 6.0% 6.2% 6.8% 6.3% 6.2%
Offices: FY 2006 FY 2005
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Company-owned offices 6,387 5,811 9.9%
Company-owned shared
office locations (5) 1,473 1,296 13.7%
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Total company-owned offices 7,860 7,107 10.6%
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Franchise offices 3,703 3,528 5.0%
Franchise shared
office locations (5) 602 526 14.4%
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Total franchise offices 4,305 4,054 6.2%
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12,165 11,161 9.0%
====================
(1) Prior year numbers have been reclassified between company-owned
and franchise operations for offices which commenced company-owned
operations during fiscal year 2006.
(2) Includes federal Taxcut software units sold, online completed and
paid federal returns and online state returns only when no payment
was made for a federal return.
(3) Calculated as the % difference between current year actuals and
day-to-day adjusted fiscal year 2005.
(4) Calculated as gross tax preparation and related fees divided by
clients served.
(5) Shared office locations include offices located within Wal-Mart,
Sears and other third-party businesses.
CONTACT: H&R Block Inc.
Media Relations:
Nick Iammartino, 816-932-4835
nick.iammartino@hrblock.com
or
Investor Relations:
Scott Dudley, 816-932-8342
scott.dudley@hrblock.com
SOURCE: H&R Block Inc.