H&R Block Reports Interim Tax Season Data; Results in Line with Full Season Expectations
KANSAS CITY, Mo., Mar 31, 2005 (BUSINESS WIRE) -- H&R Block Inc. (NYSE:HRB) today reported that tax preparation and related fees from its U.S. retail operations increased 6.8 percent to $1.7 billion through March 15, 2005. The average fee per client served in company-owned and franchised offices rose 6.7 percent to $145.08.
The number of clients served in the company's U.S. retail operations increased slightly by 0.1 percent through March 15. Digital tax solutions clients served declined 8 percent through the same period.
"The mix of clients we're serving indicates that a greater number of more complex tax returns is driving an increase in the average fee per client," said Mark A. Ernst, chairman and chief executive officer. "Overall, the results thus far are on track with our expectations for the tax season."
H&R Block plans to release additional business results for its U.S. tax operations before market opening on April 18 and May 6. The April release date was changed from the 15th to provide the company more time to analyze the tax season data.
Except for historical information contained herein, the matters set forth in this press release are forward-looking statements based upon current information and expectations. Such statements speak only as of the date on which they are made, are not guarantees of future performance, and involve certain risks, uncertainties and assumptions that could cause actual results to differ materially from what is expressed, implied or forecast in such forward-looking statements. Such differences could be caused by a number of factors, including, but not limited to: the uncertainty that the company will achieve or exceed its revenue, earnings, and earnings-per-share growth goals or expectations for fiscal year 2005, and that actual financial results for fiscal year 2005 will fall within the guidance provided by the company; the uncertainty of the company's ability to purchase shares of its common stock; the uncertainty of the effect of any share repurchases upon the company and its shareholders; the uncertainty as to the effect on financial results of the adoption of accounting pronouncements; changes in interest rates; changes in economic, political or regulatory environments; the uncertainty of assumptions utilized to estimate cash flows from residual interests in mortgage securitizations and mortgage servicing rights; risks associated with sources of liquidity for each of the lines of business of the company; changes in competition; litigation involving the company and its subsidiaries; and risks described from time to time in reports and registration statements filed by H&R Block Inc. and its subsidiaries with the Securities and Exchange Commission. Readers should take these factors into account in evaluating such forward-looking statements.
About H&R Block
Celebrating its 50th anniversary in 2005, H&R Block is the world's largest tax services provider, having served more than 400 million clients since 1955. The sixth largest retailer in the world, H&R Block has more than 12,000 locations serving taxpayers primarily in the United States, Canada and Australia.
H&R Block's subsidiaries deliver tax services and financial advice, investment and mortgage services, and business accounting and consulting services. H&R Block Financial Advisors Inc. offers investment services and securities products. With approximately 1,000 financial advisors serving clients at approximately 270 locations, H&R Block Financial Advisors is a member NYSE, SIPC, a registered broker-dealer and investment advisor. H&R Block Inc. is not a registered broker-dealer and is not a registered investment advisor. H&R Block Mortgage Corp. offers a full range of retail mortgage services. Option One Mortgage Corp. provides mortgage services and offers wholesale mortgages through large financial institutions and a network of 32,000 independent mortgage brokers. RSM McGladrey Business Services Inc. and its subsidiaries serve mid-sized businesses and their owners with tax, accounting and business consulting services, as well as personal wealth management services. H&R Block Small Business Resources is a new business currently operating in 14 U.S. cities that serves the tax, financial and business needs of small business owners. H&R Block Small Business Resources is not a licensed CPA firm. For more information about the company, visit our Online Press Center at www.hrblock.com.
H&R BLOCK
Preliminary U.S. Tax Operating Data
----------------------------------------------------------------------
(in thousands, except average fee and number of offices)
Period
----------------------------------------------------
1/1-1/31 2/1-2/15 2/16-2/28 3/1-3/15 YTD 3/15
--------- --------- ---------- --------- -----------
Tax preparation &
related fees:(1)
Fiscal year
2005
Company-
owned
offices $366,912 $436,168 $184,854 $160,245 $1,148,179
Franchise
offices 183,938 203,196 82,574 65,735 535,443
--------- --------- ---------- --------- -----------
$550,850 $639,364 $267,428 $225,980 $1,683,622
========= ========= ========== ========= ===========
Fiscal year
2004(2)
Company-
owned
offices $331,913 $393,539 $193,200 $155,995 $1,074,647
Franchise
offices 169,183 181,782 86,521 64,637 502,123
--------- --------- ---------- --------- -----------
$501,096 $575,321 $279,721 $220,632 $1,576,770
========= ========= ========== ========= ===========
Percent
change
Company-
owned
offices 10.5% 10.8% -4.3% 2.7% 6.8%
Franchise
offices 8.7% 11.8% -4.6% 1.7% 6.6%
Total
retail
offices 9.9% 11.1% -4.4% 2.4% 6.8%
Total clients
served:
Fiscal year
2005
Company-
owned
offices 2,447 2,870 1,217 1,018 7,552
Franchise
offices 1,406 1,548 618 481 4,053
Digital
tax
solutions(3) 1,129 694 322 226 2,371
--------- --------- ---------- --------- -----------
4,982 5,112 2,157 1,725 13,976
========= ========= ========== ========= ===========
Fiscal year
2004(2)
Company-
owned
offices 2,368 2,780 1,364 1,079 7,591
Franchise
offices 1,346 1,456 695 509 4,006
Digital
tax
solutions(3) 1,268 737 337 234 2,576
--------- --------- ---------- --------- -----------
4,982 4,973 2,396 1,822 14,173
========= ========= ========== ========= ===========
Percent
change
Company-
owned
offices 3.3% 3.2% -10.8% -5.7% -0.5%
Franchise
offices 4.5% 6.3% -11.1% -5.5% 1.2%
Total
retail
offices 3.7% 4.3% -10.9% -5.6% 0.1%
Digital
tax
solutions(3) -11.0% -5.8% -4.5% -3.4% -8.0%
Total 0.0% 2.8% -10.0% -5.3% -1.4%
Average fee per
client served:(4)
Fiscal year
2005
Company-
owned
offices $149.94 $151.97 $151.89 $157.41 $152.04
Franchise
offices 130.82 131.26 133.61 136.66 132.11
--------- --------- ---------- --------- -----------
$142.97 $144.72 $145.74 $150.75 $145.08
========= ========= ========== ========= ===========
Fiscal year
2004(2)
Company-
owned
offices $140.17 $141.56 $141.64 $144.57 $141.57
Franchise
offices 125.69 124.85 124.49 126.99 125.34
--------- --------- ---------- --------- -----------
$134.92 $135.82 $135.85 $138.94 $135.96
========= ========= ========== ========= ===========
Percent
change
Company-
owned
offices 7.0% 7.4% 7.2% 8.9% 7.4%
Franchise
offices 4.1% 5.1% 7.3% 7.6% 5.4%
Total
retail
offices 6.0% 6.6% 7.3% 8.5% 6.7%
Refund anticipation
loans:
Fiscal year
2005
Company-
owned
offices 1,197 1,057 191 100 2,545
Franchise
offices 714 593 94 47 1,448
Digital
tax
solutions 12 14 3 2 31
--------- --------- ---------- --------- -----------
1,923 1,664 288 149 4,024
========= ========= ========== ========= ===========
Fiscal year
2004(2)
Company-
owned
offices 1,184 1,092 216 96 2,588
Franchise
offices 709 597 106 43 1,455
Digital
tax
solutions 20 24 7 4 55
--------- --------- ---------- --------- -----------
1,913 1,713 329 143 4,098
========= ========= ========== ========= ===========
Percent
change
Company-
owned
offices 1.1% -3.2% -11.6% 4.2% -1.7%
Franchise
offices 0.7% -0.7% -11.3% 9.3% -0.5%
Total
retail
offices 1.0% -2.3% -11.5% 5.8% -1.2%
Digital
tax
solutions -40.0% -41.7% -57.1% -50.0% -43.6%
Total 0.5% -2.9% -12.5% 4.2% -1.8%
Offices: FY 2005 FY 2004
--------- ---------
Company-owned
offices 5,811 5,172
Company-owned
shared office
locations(5) 1,296 996
--------- ---------
Total
company-owned
offices 7,107 6,168
--------- ---------
Franchise
offices 3,528 3,418
Franchise
shared office
locations(5) 526 323
--------- ---------
Total
franchise
offices 4,054 3,741
--------- ---------
11,161 9,909
========= =========
(1) Includes fees received for tax return preparation services and
system administration fees in fiscal year 2004.
(2) Prior year numbers have been reclassified between company-owned
and franchise offices for offices which commenced company-owned
operations during fiscal year 2005.
(3) 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.
(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.
SOURCE: H&R Block Inc.
H&R Block Inc.
Media Relations:
Linda McDougall, 816-932-7542
lmcdougall@hrblock.com
or
Investor Relations:
Pam Kearney, 816-932-1967
pkearney@hrblock.com