H&R Block Reports Interim Tax Season Data Through Feb. 28
Re-Affirms FY02 Earnings Guidance
H&R Block Inc. (NYSE: HRB) said interim results for the current tax season through Feb. 28 indicate that the company remains on track to meet expectations set by its previously announced guidance for revenue and earnings.H&R Block reported $1.2 billion in fees from tax preparation and related services from Jan. 1 through Feb. 28, up 12.4 percent for the same period last year. Total clients served increased 3.8 percent to 11.2 million. The average fee per client served rose 9 percent to $115.93.
"These results are right on target for where we expected to be at this point in the tax season. While several important weeks of the tax season remain, filing trends suggest that the tax business will meet our previously announced revenue and earnings goals for the full year," said Mark A. Ernst, president and chief executive officer.
Through Feb. 28, tax professionals in H&R Block offices prepared 10.3 million returns, an increase of 4.9 percent. During this period, H&R Block filed 92 percent of returns processed by the company electronically.
When H&R Block announced its third quarter earnings on Feb. 27, the company said it expected its fiscal year earnings to be in the range of $2.20- to-$2.30 per share, an increase of 45-to-50 percent over last year's earnings. The company said it expected overall revenue growth to be within a target range of 10-to-15 percent for the year.
In an unrelated matter, the company noted that its third quarter earnings release attributed 66 percent of H&R Block Mortgage Corp.'s retail mortgage originations to referrals from H&R Block's tax client base. In fact, 40 percent of these referrals came from tax clients, while 26 came from H&R Block Financial Advisors and Option One Servicing clients.
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 uncertainties that the company will achieve its revenue, earnings and earnings per share goals for fiscal year 2002, that the level of growth experienced in U.S. tax operations through February 28, 2002 will continue throughout the remainder of the tax season and fiscal year, that actual financial results for fiscal year 2002 will fall within the guidance provided by the company, and of the continued strong performance of the mortgage operations segment; changes in economic, political or regulatory environments; 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
H&R Block Inc. is a diversified company with subsidiaries providing a range of financial products and services. In 2001, H&R Block served 19.2 million taxpayers - more than any tax or accounting firm -- through its more than 10,400 offices located in the United States, Canada, Australia and the United Kingdom. H&R Block served another 2.3 million tax clients through its award-winning TaxCut(R) software program and through its online tax preparation services. Investment services and securities products are offered through H&R Block Financial Advisors Inc., member NYSE, SIPC. H&R Block, Inc. is not a registered broker-dealer. H&R Block Mortgage Corporation and Option One Mortgage Corporation offer a range of home mortgage products. RSM McGladrey Inc. is a national accounting, tax and consulting firm with 100 offices nationwide, as well as an affiliation with 550 offices in 75 countries as the U.S. member of RSM International. Additional information is available on the company's Web site at www.hrblock.com .
H&R Block, Inc.
Preliminary U.S. Tax Operating Data
Amounts in thousands, except average charge and number of offices
Period
1/1-1/31 2/1-2/15 2/16-2/28 YTD 2/28
Tax preparation &
related fees
Fiscal year 2002
Company owned
offices $259,783 $355,534 $156,840 $772,157
Franchised
offices 149,078 199,762 91,427 440,267
$408,861 $555,296 $248,267 $1,212,424
Fiscal year 2001
Company owned
offices $226,830 $321,949 $144,275 $693,054
Franchised
offices 124,116 181,301 80,551 385,968
$350,946 $503,250 $224,826 $1,079,022
Percent change
Company owned
offices 14.5% 10.4% 8.7% 11.4%
Franchised offices 20.1% 10.2% 13.5% 14.1%
Total 16.5% 10.3% 10.4% 12.4%
Tax returns prepared
Fiscal year 2002
Company owned
offices 2,129 2,873 1,253 6,255
Franchised
offices 1,354 1,815 837 4,006
3,483 4,688 2,090 10,261
Fiscal year 2001
Company owned
offices 2,029 2,796 1,231 6,056
Franchised
offices 1,214 1,740 773 3,727
3,243 4,536 2,004 9,783
Percent change
Company owned
offices 4.9% 2.8% 1.8% 3.3%
Franchised offices 11.5% 4.3% 8.3% 7.5%
Total 7.4% 3.4% 4.3% 4.9%
Total clients served
Fiscal year 2002
Company owned
offices 2,149 2,902 1,264 6,315
Franchised offices 1,406 1,877 860 4,143
E-commerce * 143 414 219 776
3,698 5,193 2,343 11,234
Fiscal year 2001
Company owned
offices 2,069 2,852 1,252 6,173
Franchised offices 1,303 1,853 812 3,968
E-commerce * 109 367 202 678
3,481 5,072 2,266 10,819
Percent change
Company owned
offices 3.9% 1.8% 1.0% 2.3%
Franchised offices 7.9% 1.3% 5.9% 4.4%
E-commerce * 31.2% 12.8% 8.4% 14.5%
Total 6.2% 2.4% 3.4% 3.8%
Tax returns filed
electronically**
Fiscal year 2002
Company owned
offices 2,081 2,726 1,109 5,916
Franchised offices 1,333 1,675 693 3,701
E-commerce * 119 382 214 715
3,533 4,783 2,016 10,332
Fiscal year 2001
Company owned
offices 1,977 2,613 1,065 5,655
Franchised offices 1,204 1,578 597 3,379
E-commerce * 96 352 194 642
3,277 4,543 1,856 9,676
Percent change
Company owned
offices 5.3% 4.3% 4.1% 4.6%
Franchised offices 10.7% 6.2% 16.1% 9.5%
E-commerce * 24.0% 8.5% 10.3% 11.4%
Total 7.8% 5.3% 8.6% 6.8%
Percent filed electronically
Fiscal year 2002
Company owned
offices 96.8% 93.9% 87.7% 93.7%
Franchised offices 94.8% 89.2% 80.6% 89.3%
E-commerce * 83.2% 92.3% 97.7% 92.1%
95.5% 92.1% 86.0% 92.0%
Fiscal year 2001
Company owned
offices 95.6% 91.6% 85.1% 91.6%
Franchised offices 92.4% 85.2% 73.5% 85.2%
E-commerce * 88.1% 95.9% 96.0% 94.7%
94.1% 89.6% 81.9% 89.4%
Average fee per client served
Fiscal year 2002
Company owned
offices $120.89 $122.51 $124.08 $ 122.27
Franchised offices $106.03 $106.43 $106.31 $ 106.27
$115.01 $116.20 $116.89 $ 115.93
Fiscal year 2001
Company owned
offices $109.63 $112.89 $115.24 $ 112.27
Franchised offices $ 95.25 $ 97.84 $ 99.20 $97.27
$104.08 $106.96 $108.93 $ 106.40
Percent change
Company owned
offices 10.3% 8.5% 7.7% 8.9%
Franchised offices 11.3% 8.8% 7.2% 9.3%
Total 10.5% 8.6% 7.3% 9.0%
Refund anticipation loans
Fiscal year 2002
Company owned
offices 1,196 1,318 298 2,812
Franchised offices 767 824 172 1,763
E-commerce * 8 17 7 32
1,971 2,159 477 4,607
Fiscal year 2001
Company owned
offices 1,020 1,177 272 2,469
Franchised offices 647 704 150 1,501
E-commerce * 5 17 8 30
1,672 1,898 430 4,000
Percent change
Company owned
offices 17.3% 12.0% 9.6% 13.9%
Franchised offices 18.6% 17.1% 14.7% 17.5%
E-commerce * 60.0% 0.0% -12.5% 6.7%
Total 17.9% 13.8% 10.9% 15.2%
Offices FY 2002 FY 2001 % Change
Company owned
offices 5,017 5,060 -0.8%
Franchised offices 3,998 4,012 -0.3%
9,015 9,072 -0.6%
* Includes on-line completed and paid returns and e-filings for software
clients.
** Includes Federal only. State returns also electronically filed are
not included in this total.
SOURCE H&R Block Inc.
CONTACT: Robert Schneider, Media Relations, +1-816-932-4835, or Mark Barnett, Investor Relations, +1-816-701-4443, both of H&R Block URL: http://www.hrblock.com
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