H&R Block Reports Interim Tax Season Data Through March
KANSAS CITY, Mo.--(BUSINESS WIRE)--April 16, 2004--H&R Block Inc. (NYSE:HRB) said U.S. tax preparation and related fees for Jan. 1 through March 31 increased 5.7 percent to $1.8 billion.
The company's U.S. tax business has served 15.8 million clients, about the same as last year, including a 13.8 percent increase in digital tax solutions clients and a 2.5 percent decline in retail office clients.
For the period ending March 31, the average fee per retail office client was $137.33, an increase of 8.4 percent.
"Results for the second half of March were consistent with the trends we've experienced all season, including higher revenue per client and fewer clients served in our retail offices," Chairman and Chief Executive Officer Mark A. Ernst said.
"We continue to be pleased with the growth in our digital tax solutions clients," he said.
The company is maintaining its earnings guidance for the fiscal year, which is in the range of $3.65 to $3.85 per share.
The company also noted that it has corrected its count of refund anticipation loans (RALs), which is slightly lower than stated previously. The count through March 15 was lowered by approximately 2 percent, because the source data did not properly reflect RAL denials.
H&R Block plans to release preliminary business results for the final two weeks of the U.S. tax season before market opening on April 30.
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 2004 and that actual financial results for fiscal year 2004 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
H&R Block Inc. (www.hrblock.com) is a diversified company with subsidiaries that deliver tax, financial, mortgage and business products and services. It is the only major company with subsidiaries offering a full range of software, online and in-office tax solutions, combined with personalized financial advice about retirement savings, home ownership, and other opportunities to help clients build a better financial future. As the world's largest tax services company, H&R Block served nearly 21 million clients in the U.S. and 11 countries in 2003. H&R Block Financial Advisors Inc. offers investment services and securities products. With more than 1,000 financial advisors serving clients at more than 400 offices, H&R Block Financial Advisors Inc. is a member NYSE, SIPC, a registered broker-dealer and a registered 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 products. Option One Mortgage Corp. provides mortgage services and offers wholesale mortgage products through large financial institutions and a network of 24,000 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, Inc.
Preliminary U.S. Tax Operating Data
Amounts in thousands, except average fee and number of offices
Period
1/1- 2/1- 2/16- 3/1- 3/16- YTD
1/31 2/15 2/29 3/15 3/31 3/31
------ ------- ------- ------- ------ -------
Tax preparation &
related fees(1)
----------------
Fiscal year 2004
Company-owned
offices(2) $309,034 $364,345 $180,131 $142,323 $145,732 $1,141,565
Former major
franchise
territories(3) 21,889 27,146 11,846 12,661 10,809 84,351
-------- -------- -------- -------- -------- -----------
Total company-
owned
offices 330,923 391,491 191,977 154,984 156,541 1,225,916
Franchise
offices(4) 169,338 182,173 86,199 64,612 61,204 563,526
-------- ------- ------- ------- ------- ----------
$500,261 $573,664 $278,176 $219,596 $217,745 $1,789,442
======== ======== ======== ======== ======== ===========
Fiscal year 2003(5)
Company-owned
offices(2) $288,175 $365,196 $151,759 $141,083 $137,640 $1,083,853
Former major
franchise
territories(3) 18,714 28,246 11,742 11,206 10,004 79,912
-------- -------- -------- -------- -------- -----------
Total company-
owned
offices 306,889 393,442 163,501 152,289 147,644 1,163,765
Franchise
offices(4) 153,725 180,043 76,308 62,102 56,966 529,144
-------- -------- -------- -------- -------- -----------
$460,614 $573,485 $239,809 $214,391 $204,610 $1,692,909
======== ======== ======== ======== ======== ===========
Percent change
Company-owned
offices 7.2% -0.2% 18.7% 0.9% 5.9% 5.3%
Former major
franchise
territories 17.0% -3.9% 0.9% 13.0% 8.1% 5.6%
----------------------------------------------------------------------
Total company-
owned offices 7.8% -0.5% 17.4% 1.8% 6.0% 5.3%
----------------------------------------------------------------------
Franchise
offices 10.2% 1.2% 13.0% 4.0% 7.4% 6.5%
----------------------------------------------------------------------
Total retail
offices 8.6% 0.0% 16.0% 2.4% 6.4% 5.7%
----------------------------------------------------------------------
Total clients served
--------------------
Fiscal year 2004
Company-owned
offices(2) 2,191 2,553 1,263 976 944 7,927
Former major
franchise
territories(3) 168 208 89 94 76 635
----- ------ ------ ------ ------ --------
Total company-
owned offices 2,359 2,761 1,352 1,070 1,020 8,562
Franchise
offices(4) 1,347 1,460 692 509 460 4,468
Digital tax
solutions(6) 1,268 737 337 234 193 2,769
----- ------ ------ ------ ------ --------
4,974 4,958 2,381 1,813 1,673 15,799
===== ======= ====== ====== ====== ========
Fiscal year 2003(5)
Company-owned
offices(2) 2,228 2,734 1,153 1,038 973 8,126
Former major
franchise
territories(3) 157 233 98 93 78 659
----- ------ ------ ------ ------ --------
Total company-
owned offices 2,385 2,967 1,251 1,131 1,051 8,785
Franchise
offices(4) 1,330 1,565 663 541 477 4,576
Digital tax
solutions(6) 1,042 634 333 227 197 2,433
----- ------ ------ ------ ------ --------
4,757 5,166 2,247 1,899 1,725 15,794
===== ====== ====== ====== ====== ========
Percent change
Company-owned
offices -1.7% -6.6% 9.5% -6.0% -3.0% -2.5%
Former major
franchise
territories 7.0% -10.7% -9.2% 1.1% -2.6% -3.6%
----------------------------------------------------------------------
Total company-
owned offices -1.1% -6.9% 8.1% -5.4% -3.0% -2.5%
----------------------------------------------------------------------
Franchise
offices 1.3% -6.7% 4.4% -5.9% -3.6% -2.4%
----------------------------------------------------------------------
Total retail
offices -0.2% -6.9% 6.8% -5.6% -3.1% -2.5%
----------------------------------------------------------------------
Digital tax
solutions 21.7% 16.3% 1.2% 3.1% -2.0% 13.8%
----------------------------------------------------------------------
Total 4.6% -4.0% 6.0% -4.5% -3.0% 0.0%
----------------------------------------------------------------------
Average fee per
client served(7)
----------------
Fiscal year 2004
Company-owned
offices(2) $141.05 $142.71 $142.62 $145.82 $154.38 $144.01
Former major
franchise
territories(3)130.29 130.51 133.10 134.69 142.22 132.84
------ ------- ------- ------- ------- ---------
Total company-
owned offices 140.28 141.79 141.99 144.84 153.47 143.18
Franchise
offices(4) 125.71 124.78 124.57 126.94 133.05 126.12
------ ------- ------- ------- ------- ---------
$134.99 $135.91 $136.09 $139.07 $147.13 $137.33
====== ======== ======= ======= ======= =========
Fiscal year 2003(5)
Company-owned
offices (2) $129.34 $133.58 $131.62 $135.92 $141.46 $133.38
Former major
franchise
territories(3) 119.20 121.23 119.82 120.49 128.26 121.26
------ ------- ------- ------- ------- ---------
Total company-
owned offices 128.67 132.61 130.70 134.65 140.48 132.47
Franchise
offices (4) 115.58 115.04 115.10 114.79 119.43 115.63
------ ------- ------- ------- ------- ---------
$123.99 $126.54 $125.29 $128.22 $133.91 $126.71
====== ======= ======= ======= ======= =========
Percent change
Company-owned
offices 9.1% 6.8% 8.4% 7.3% 9.1% 8.0%
Former major
franchise
territories 9.3% 7.7% 11.1% 11.8% 10.9% 9.5%
----------------------------------------------------------------------
Total company-
owned offices 9.0% 6.9% 8.6% 7.6% 9.3% 8.1%
----------------------------------------------------------------------
Franchise
offices 8.8% 8.5% 8.2% 10.6% 11.4% 9.1%
----------------------------------------------------------------------
Total retail
offices 8.9% 7.4% 8.6% 8.5% 9.9% 8.4%
----------------------------------------------------------------------
Refund anticipation loans
-------------------------
Fiscal year 2004(9)
Company-owned
offices(2) 1,106 1,013 197 89 54 2,459
Former major
franchise
territories(3) 80 75 15 7 4 181
------ ------- ------- ------- ------- ---------
Total company-
owned offices 1,186 1,088 212 96 58 2,640
Franchise
offices(4) 708 594 104 44 25 1,475
Digital tax
solutions(6) 20 24 7 4 2 57
------ ------- ------- ------- ------- ---------
1,914 1,706 323 144 85 4,172
====== ======= ======= ======= ======= =========
Fiscal year 2003(5)
Company-owned
offices(2) 1,146 1,148 211 121 62 2,688
Former major
franchise
territories(3) 81 74 16 8 4 183
------ ------- ------- ------- ------- ---------
Total company-
owned offices 1,227 1,222 227 129 66 2,871
Franchise
offices(4) 703 653 122 58 28 1,564
Digital tax
solutions(6) 19 29 9 6 4 67
------ ------- ------- ------- ------- ---------
1,949 1,904 358 193 98 4,502
====== ======= ======= ======= ======= =========
Percent change
Company-owned
offices -3.5% -11.8% -6.6% -26.5% -12.9% -8.5%
Former major
franchise
territories -1.2% 1.4% -6.3% -12.5% 0.0% -1.1%
----------------------------------------------------------------------
Total company-
owned offices -3.3% -11.0% -6.6% -25.6% -12.1% -8.1%
----------------------------------------------------------------------
Franchise
offices 0.7% -9.0% -14.8% -24.1% -10.7% -5.7%
----------------------------------------------------------------------
Total retail
offices -1.9% -10.3% -9.5% -25.1% -11.7% -7.2%
----------------------------------------------------------------------
Digital tax
solutions 5.3% -17.2% -22.2% -33.3% -50.0% -14.9%
----------------------------------------------------------------------
Total -1.8% -10.4% -9.8% -25.4% -13.3% -7.3%
----------------------------------------------------------------------
Offices FY 2004 FY 2003
--------------------------------
Company-owned
offices (2) 4,746 4,672
Former major
franchise
territories(3) 459 --
Company-owned
shared office
locations(8) 947 607
----- ------
Total company-
owned offices 6,152 5,279
----- ------
Franchise
offices (4) 3,374 3,398
Former major
franchise
territories(3) -- 529
Franchise
shared office
locations(8) 325 95
----- ------
Total franchise
offices 3,699 4,022
----- ------
9,851 9,301
===== ======
(1) Includes fees received for tax return preparation services and
system administration fees.
(2) Excludes company-owned offices in former major franchise
territories which commenced operations during fiscal year 2004.
(3) Impact of company-owned offices in former major franchise
territories which commenced operations during fiscal year 2004.
(4) Represents remaining major franchise territories and other
franchises.
(5) Prior year numbers have been reclassified between company-owned
and franchise offices for offices in former franchise territories
which commenced company-owned operations during fiscal year 2004.
(6) Includes on-line completed and paid returns and federal software
units sold.
(7) Calculated as tax preparation and related fees divided by clients
served.
(8) Shared locations include offices located within Wal-Mart, Sears
and other third-party businesses.
(9) RALs for all periods presented in fiscal year 2004 have been
corrected from previously reported to reflect modifications made
to the source reports to properly reflect RAL denials. The
cumulative amount of the correction through March 15 was a
reduction of approximately 82,000 RALs.
CONTACT: H&R Block Inc.
Media Relations:
Bob Schneider, 816-932-4835
bschneider@hrblock.com
or
Investor Relations:
Mark Barnett, 816-701-4443
marbarnett@hrblock.com
SOURCE: H&R Block Inc.