Investor Relations


Press Release Details

H&R Block Reports Strong Fiscal 2021 Results; Increases Dividend

June 15, 2021
  • The Company achieved robust growth across total filing volumes, total market share, Assisted filings and market share, and Do-It-Yourself (DIY) revenue in the 2021 tax season. When including total tax season performance through the May 17, 2021 filing deadline, the Company substantially exceeded its original fiscal 2021 revenue and earnings outlook.
  • The Company announced a 4% increase in its quarterly dividend to $0.27 per share. This is the fifth increase in six years, resulting in a 35% total increase in that time frame.
  • The Company repurchased 2.11 million shares in its fiscal fourth quarter, resulting in total share repurchases of 11.6 million shares and $188 million, or $16.29 per share, for fiscal 2021.
  • The Company announced its fiscal year-end will change to June 30, effective immediately.

KANSAS CITY, Mo., June 15, 2021 (GLOBE NEWSWIRE) -- H&R Block, Inc. (NYSE: HRB) (the “Company”) today released its financial results for the fiscal year ended April 30, 2021. The extension of the U.S. federal tax filing deadline from April 15 to May 17 resulted in the tax season concluding beyond fiscal 2021. Including performance through May 18, 2021, in fiscal 2021, would result in the Company substantially exceeding its original revenue and earnings outlook for 2021.

“I am proud of the outstanding growth across our business," said Jeff Jones, H&R Block's president and chief executive officer. "Our team provided help and inspired financial confidence for millions of consumers and small business owners this year. We made tremendous progress in our first year of Block Horizons, blending technology and digital tools with human expertise in tax, improving our offerings in small business, driving significant growth in Wave, and making progress on our new mobile banking platform.”

Fiscal 2021 Results From Continuing Operations

"Growth in total filings, strong performance from Wave, and proactive fiscal management resulted in a strong 2021 that exceeded our expectations," said Tony Bowen, H&R Block's chief financial officer. "We are confident in our future, as evidenced by increasing our quarterly dividend by 4% and repurchasing 6% of our shares outstanding this fiscal year."

(in millions, except EPS)   Fiscal Year 2021   Fiscal Year 2020
Revenue   $ 3,414     $ 2,640    
Pretax Income (Loss)   $ 669     $ (3 )  
Net Income   $ 590     $ 6    
Weighted-Avg. Shares - Diluted   188.8     198.1    
EPS2   $ 3.11     $ 0.03    
Adjusted EPS2,3   $ 3.39     $ 0.84    
Adjusted EBITDA3   $ 932     $ 368    

Key Financial Metrics

  • Total revenue of $3.4 billion increased by $774 million, or 29.3%, due to an increase in U.S. tax return volumes due to the extension of the 2020 tax season into our fiscal 2021, stronger mix in DIY, Emerald Card revenues related to federal stimulus payments, and strong growth from Wave.
  • Total operating expenses of $2.6 billion increased by $82 million, or 3.2%, due to an increase in variable labor, partially offset by impairment charges related to the pandemic in fiscal 2020, and lower bank partner fees and travel-related costs.
  • Pretax income of $669 million compared favorably to a pretax loss of $3 million in the prior year.
  • Earnings per share from continuing operations increased $3.08 to $3.11; adjusted earnings per share from continuing operations increased from $0.84 to $3.39.

Dividends and Share Repurchases

The company announced today that its Board of Directors increased the quarterly dividend by 4%, representing the fifth increase in the dividend in six years and a 35% total increase over that time frame. The quarterly cash dividend is now $0.27 per share, payable on July 1, 2021 to shareholders of record as of June 25, 2021. The Company has paid consecutive quarterly dividends since it became publicly traded in 1962. Future actions regarding dividends will be dependent upon the Board's approval following consideration of operating results, market conditions, and capital needs, among other factors.

In fiscal 2021, the company repurchased 11.6 million shares for $188 million, at an average price of $16.29. Share repurchases made in the fourth quarter of fiscal 2021 totaled $38 million. Approximately $564 million remains under the company's current share repurchase authorization, which expires in June of 2022.

Line of Credit
The Company amended its line of credit to a new five-year term, resulting in favorable rates, reduced capacity to better align with business needs, and lower costs. Additional details regarding this line of credit can be found in a related Form 8-K filing today.

Change in Fiscal Year

The Company announced a change to its fiscal year-end from April 30 to June 30, effective immediately. The change allows for better alignment of complete tax seasons in comparable fiscal periods and other related benefits. The Company plans to file a transition report on form 10-QT for the transition period of May 1, 2021, through June 30, 2021, later this summer. The Company’s fiscal 2022 will begin on July 1, 2021, and end on June 30, 2022.

Discontinued Operations

For information on Sand Canyon, please refer to disclosures in the company’s reports on Forms 10-K, 10-Q, and other filings with the SEC.

Conference Call

Discussion of fiscal 2021 results, outlook, and a general business update will occur during the company’s previously announced fiscal 2021 conference call for analysts and investors that will be held at 4:30 p.m. Eastern Time on Tuesday, June 15, 2021. To access the call, please dial the number below approximately 10 minutes prior to the scheduled starting time:

U.S./Canada (855) 859-2056 or International (404) 537-3406

Conference ID: 2575807

The call, along with a presentation for viewing, will also be webcast in a listen-only format for the media and public. The link to the webcast can be accessed directly at https://investors.hrblock.com. The presentation will be posted on the Quarterly Results page at https://investors.hrblock.com following the conclusion of the call.

A replay of the call will be available beginning at 7:30 p.m. Eastern time on June 15, 2021 and continuing for seven days by dialing (855) 859-2056 (U.S./Canada) or (404) 537-3406 (International). The conference ID is 5554906. The webcast will be available for replay beginning on June 17, 2021 and continuing for 90 days at https://investors.hrblock.com.

About H&R Block
H&R Block, Inc. (NYSE: HRB) provides help and inspires confidence in its clients and communities everywhere through global tax preparation, financial services and small business solutions. The company blends digital innovation with the human expertise of its associates and franchisees as it helps people get the best outcome at tax time, and better manage and access their money year-round. Through Block Advisors and Wave, the company helps small business owners thrive with innovative products like Wave Money, a small business banking and bookkeeping solution, and the only business bank account to manage bookkeeping automatically. For more information visit hrblock.com/news and follow @HRBlockNews.

About Non-GAAP Financial Information

This press release and the accompanying tables include non-GAAP financial information. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles, please see the section of the accompanying tables titled "Non-GAAP Financial Information."

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as "expects," "anticipates," "intends," "plans," "believes," "commits," "seeks," "estimates," "projects," "forecasts," "targets," "would," "will," "should," "goal," "could," "may," or other similar expressions. Forward-looking statements provide management's current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. They may include estimates of revenues, client trajectory, income, effective tax rate, earnings per share, cost savings, capital expenditures, dividends, share repurchases, liquidity, capital structure, market share, industry volumes, or other financial items, descriptions of management’s plans or objectives for future operations, products or services, or descriptions of assumptions underlying any of the above. They also include the expected impact of the coronavirus (COVID-19) pandemic, including, without limitation, the impact on economic and financial markets, the Company’s capital resources and financial condition, the expected use of proceeds under the Company’s revolving credit facility, future expenditures, potential regulatory actions, such as extensions of tax filing deadlines or other related relief, changes in consumer behaviors and modifications to the Company’s operations related thereto. All forward-looking statements speak only as of the date they are made and reflect the company's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Furthermore, the company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions, factors, or expectations, new information, data or methods, future events or other changes, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to a variety of economic, competitive and regulatory factors, many of which are beyond the company's control, that are described in our Annual Report on Form 10-K for the most recently completed fiscal year in the section entitled "Risk Factors" and additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. You may get such filings for free at our website at http://investors.hrblock.com. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.
__________________

All amounts in this release are unaudited.  Unless otherwise noted, all comparisons refer to the current period compared to the corresponding prior year period.
2 All per share amounts are based on weighted average fully diluted shares over the corresponding period.
3 Adjusted earnings per share from continuing operations and adjusted EBITDA from continuing operations are non-GAAP financial measures. See "About Non-GAAP Financial Information" below for more information regarding financial measures not prepared in accordance with generally accepted accounting principles (GAAP).

For Further Information

Investor Relations:   Colby Brown, (816) 854-4559, colby.brown@hrblock.com
    Michaella Gallina, (816) 854-3022, michaella.gallina@hrblock.com
Media Relations:   Angela Davied, (816) 854-5798, angela.davied@hrblock.com

 

CONSOLIDATED STATEMENTS OF OPERATIONS       (unaudited, in 000s - except per share amounts)
    Three months ended April 30,   Year ended April 30,
    2021   2020   2021   2020
                 
REVENUES:                
Service revenues   $ 2,110,618       $ 1,635,561       $ 3,067,223       $ 2,327,323    
Royalty, product and other revenues   217,562       173,791       346,764       312,397    
    2,328,180       1,809,352       3,413,987       2,639,720    
OPERATING EXPENSES:                
Costs of revenues   901,728       767,157       1,842,092       1,712,276    
Impairment of goodwill         106,000             106,000    
Selling, general and administrative   340,900       268,603       802,268       744,361    
Total operating expenses   1,242,628       1,141,760       2,644,360       2,562,637    
                 
Other income (expense), net   1,220       1,896       5,979       15,637    
Interest expense on borrowings   (21,551 )     (27,412 )     (106,870 )     (96,094 )  
Income (loss) from continuing operations before income taxes (benefit)   1,065,221       642,076       668,736       (3,374 )  
Income taxes (benefit)   114,254       178,616       78,524       (9,530 )  
Net income from continuing operations   950,967       463,460       590,212       6,156    
Net loss from discontinued operations   (1,715 )     (3,057 )     (6,421 )     (13,682 )  
NET INCOME (LOSS)   $ 949,252       $ 460,403       $ 583,791       $ (7,526 )  
                 
BASIC EARNINGS (LOSS) PER SHARE:                
Continuing operations   $ 5.22       $ 2.40       $ 3.15       $ 0.03    
Discontinued operations   (0.01 )     (0.01 )     (0.04 )     (0.07 )  
Consolidated   $ 5.21       $ 2.39       $ 3.11       $ (0.04 )  
                 
WEIGHTED AVERAGE BASIC SHARES   181,512       192,475       186,832       196,701    
                 
DILUTED EARNINGS (LOSS) PER SHARE:                
Continuing operations   $ 5.14       $ 2.39       $ 3.11       $ 0.03    
Discontinued operations   (0.01 )     (0.02 )     (0.03 )     (0.07 )  
Consolidated   $ 5.13       $ 2.37       $ 3.08       $ (0.04 )  
                 
WEIGHTED AVERAGE DILUTED SHARES   184,354       193,726       188,777       198,108    
                 

 

CONSOLIDATED BALANCE SHEETS   (unaudited, in 000s - except per share data)
As of April 30,   2021   2020
         
ASSETS        
Cash and cash equivalents   $ 934,251       $ 2,661,914    
Cash and cash equivalents - restricted   128,669       211,106    
Receivables, net   197,876       133,197    
Income taxes receivable   333,366       28,477    
Prepaid expenses and other current assets   105,562       52,042    
Total current assets   1,699,724       3,086,736    
Property and equipment, net   148,490       184,367
Operating lease right of use asset   437,246       494,788
Intangible assets, net   360,148       414,976    
Goodwill   757,659       712,138    
Deferred tax assets and income taxes receivable   182,848       151,195    
Other noncurrent assets   67,531       67,847    
Total assets   $ 3,653,646       $ 5,112,047    
LIABILITIES AND STOCKHOLDERS’ EQUITY        
LIABILITIES:        
Accounts payable and accrued expenses   $ 198,084       $ 203,103    
Accrued salaries, wages and payroll taxes   270,982       116,375    
Accrued income taxes and reserves for uncertain tax positions   287,404       209,816    
Current portion of long-term debt         649,384    
Operating lease liabilities   206,393       195,537    
Deferred revenue and other current liabilities   200,216       201,401    
Total current liabilities   1,163,079       1,575,616    
Long-term debt and line of credit borrowings   1,490,039       2,845,873    
Deferred tax liabilities and reserves for uncertain tax positions   279,351       182,441    
Operating lease liabilities   242,626       312,566    
Deferred revenue and other noncurrent liabilities   126,150       124,510    
Total liabilities   3,301,245       5,041,006    
COMMITMENTS AND CONTINGENCIES        
STOCKHOLDERS’ EQUITY:        
Common stock, no par, stated value $.01 per share   2,167       2,282    
Additional paid-in capital   783,292       775,387    
Accumulated other comprehensive income (loss)   4,786       (51,576 )  
Retained earnings   248,506       42,965    
Less treasury shares, at cost   (686,350 )     (698,017 )  
Total stockholders' equity   352,401       71,041    
Total liabilities and stockholders' equity   $ 3,653,646       $ 5,112,047    
         

 

CONSOLIDATED STATEMENTS OF CASH FLOWS   (unaudited, in 000s)
Year ended April 30,   2021   2020
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net income (loss)   $ 583,791       $ (7,526 )  
                     
Adjustments to reconcile net income (loss) to net cash provided by operating activities:        
Depreciation and amortization   156,852       169,536    
Provision for bad debt   73,451       76,621    
Deferred taxes   (22,583 )     (8,300 )  
Stock-based compensation   28,271       28,045    
Impairment of goodwill         106,000    
Changes in assets and liabilities, net of acquisitions:        
Receivables   (150,933 )     (66,896 )  
Prepaid expenses and other current and noncurrent assets   (49,498 )     39,377    
Accounts payable, accrued expenses, salaries, wages and payroll taxes   150,635       (124,019 )  
Deferred revenue, other current and noncurrent liabilities   (1,160 )     (9,096 )  
Income tax receivables, accrued income taxes and income tax reserves   (138,152 )     (87,423 )  
Other, net   (4,746 )     (7,358 )  
  Net cash provided by operating activities   625,928       108,961    
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Capital expenditures   (52,792 )     (81,685 )  
Payments made for business acquisitions, net of cash acquired   (15,576 )     (450,242 )  
Franchise loans funded   (26,917 )     (35,264 )  
Payments from franchisees   41,215       39,919    
Other, net   8,547       57,041    
Net cash used in investing activities   (45,523 )     (470,231 )  
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Repayments of line of credit borrowings   (3,275,000 )     (1,335,000 )  
Proceeds from line of credit borrowings   1,275,000       3,335,000    
Repayments of long-term debt   (650,000 )        
Proceeds from issuance of long-term debt   647,965          
Dividends paid   (195,068 )     (204,870 )  
Repurchase of common stock, including shares surrendered   (191,294 )     (256,214 )  
Proceeds from exercise of stock options   2,140       2,075    
Other, net   (22,566 )     (9,143 )  
Net cash provided by (used in) financing activities   (2,408,823 )     1,531,848    
         
Effects of exchange rate changes on cash   18,318       (5,285 )  
         
Net increase (decrease) in cash and cash equivalents, including restricted balances   (1,810,100 )     1,165,293    
Cash, cash equivalents and restricted cash, beginning of the year   2,873,020       1,707,727    
Cash, cash equivalents and restricted cash, end of the year   $ 1,062,920       $ 2,873,020    
         
SUPPLEMENTARY CASH FLOW DATA:        
Income taxes paid, net of refunds received   $ 236,459       $ 89,204    
Interest paid on borrowings   103,855       87,426    
Accrued additions to property and equipment   1,643       1,185    
         

 

FINANCIAL RESULTS   (unaudited, in 000s - except per share amounts)
    Three months ended April 30,   Year ended April 30,
    2021   2020   2021   2020
REVENUES:                
U.S. assisted tax preparation   $ 1,493,968       $ 1,175,129       $ 2,035,107       $ 1,533,303    
U.S. royalties   158,826       133,767       226,253       193,411    
U.S. DIY tax preparation   218,724       166,861       313,055       208,901    
International   117,521       82,754       249,868       180,065    
Refund Transfers   151,577       101,893       163,329       154,687    
Emerald Card®   87,916       53,609       136,717       92,737    
Peace of Mind® Extended Service Plan   26,011       29,734       98,882       105,185    
Tax Identity Shield®   21,495       14,489       40,624       31,797    
Interest and fee income on Emerald AdvanceSM   24,676       27,087       53,430       60,867    
Wave   17,080       10,971       58,277       36,711    
Other   10,386       13,058       38,445       42,056    
Total revenues   2,328,180       1,809,352       3,413,987       2,639,720    
                 
Compensation and benefits:                
Field wages   490,711       398,582       797,262       678,813    
Other wages   90,654       40,159       272,664       218,548    
Benefits and other compensation   102,566       74,956       208,147       175,535    
    683,931       513,697       1,278,073       1,072,896    
                 
Occupancy   116,508       117,932       414,389       410,402    
Marketing and advertising   167,007       153,904       261,960       255,094    
Depreciation and amortization   39,689       44,127       156,852       169,536    
Bad debt   50,004       39,876       78,763       77,470    
Impairment of goodwill         106,000             106,000    
Other   185,489       166,224       454,323       471,239    
Total operating expenses   1,242,628       1,141,760       2,644,360       2,562,637    
                 
Other income (expense), net   1,220       1,896       5,979       15,637    
Interest expense on borrowings   (21,551 )     (27,412 )     (106,870 )     (96,094 )  
Income (loss) from continuing operations before income taxes (benefit)   1,065,221       642,076       668,736       (3,374 )  
Income taxes (benefit)   114,254       178,616       78,524       (9,530 )  
Net income from continuing operations   950,967       463,460       590,212       6,156    
Net loss from discontinued operations   (1,715 )     (3,057 )     (6,421 )     (13,682 )  
NET INCOME (LOSS)   $ 949,252       $ 460,403       $ 583,791       $ (7,526 )  
                 
BASIC EARNINGS (LOSS) PER SHARE:                
Continuing operations   $ 5.22       $ 2.40       $ 3.15       $ 0.03    
Discontinued operations   (0.01 )     (0.01 )     (0.04 )     (0.07 )  
Consolidated   $ 5.21       $ 2.39       $ 3.11       $ (0.04 )  
                 
WEIGHTED AVERAGE BASIC SHARES   181,512       192,475       186,832       196,701    
                 
DILUTED EARNINGS (LOSS) PER SHARE:                
Continuing operations   $ 5.14       $ 2.39       $ 3.11       $ 0.03    
Discontinued operations   (0.01 )     (0.02 )     (0.03 )     (0.07 )  
Consolidated   $ 5.13       $ 2.37       $ 3.08       $ (0.04 )  
                 
WEIGHTED AVERAGE DILUTED SHARES   184,354       193,726       188,777       198,108    
                 
Adjusted EPS(1)   $ 5.16       $ 3.01       $ 3.39       $ 0.84    
EBITDA(1)   1,126,461       713,615       932,458       262,256    
Adjusted EBITDA (1)   1,126,461       819,615       932,458       368,256    
Adjusted EBITDA margin (1)   48.4 %     45.3 %     27.3 %     14.0 %  
                 

(1) All non-GAAP measures are results from continuing operations. See "Non-GAAP Financial Information" for a reconciliation of non-GAAP measures.

 

NON-GAAP FINANCIAL MEASURES        
                 
                (in 000s)
    Three months ended April 30,   Year ended April 30,
NON-GAAP FINANCIAL MEASURE - EBITDA   2021   2020   2021   2020
                 
Net income (loss) - as reported   $ 949,252     $ 460,403     $ 583,791     $ (7,526 )  
Discontinued operations, net   1,715     3,057     6,421     13,682    
Net income from continuing operations - as reported   950,967     463,460     590,212     6,156    
Add back:                
Income taxes (benefit)   114,254     178,616     78,524     (9,530 )  
Interest expense   21,551     27,412     106,870     96,094    
Depreciation and amortization   39,689     44,127     156,852     169,536    
    175,494     250,155     342,246     256,100    
                 
EBITDA from continuing operations   1,126,461     713,615     932,458     262,256    
Adjustments:                
Impairment of goodwill       106,000         106,000    
Adjusted EBITDA from continuing operations   $ 1,126,461     $ 819,615     $ 932,458     $ 368,256    
                 
EBITDA margin from continuing operations (1)   48.4 %   39.4 %   27.3 %   9.9 %  
Adjusted EBITDA margin from continuing operations (2)   48.4 %   45.3 %   27.3 %   14.0 %  
                 

(1) EBITDA margin from continuing operations is computed as EBITDA from continuing operations divided by revenues from continuing operations.
(2) Adjusted EBITDA margin from continuing operations is computed as adjusted EBITDA from continuing operations divided by revenues from continuing operations.

            (in 000s, except per share amounts)
    Three months ended April 30,   Year ended April 30,
NON-GAAP FINANCIAL MEASURE - ADJUSTED EPS   2021   2020   2021   2020
                 
Net income from continuing operations - as reported   $ 950,967       $ 463,460       $ 590,212       $ 6,156    
                 
Adjustments:                
Amortization of intangibles related to acquisitions (pretax)   16,211       19,564       68,387       74,561    
Impairment of goodwill (pretax)         106,000             106,000    
Tax effect of adjustments(1)   (11,741 )     (5,459 )     (15,884 )     (19,126 )  
Adjusted net income from continuing operations   $ 955,437       $ 583,565       $ 642,715       $ 167,591    
                 
Diluted earnings per share from continuing operations - as reported   $ 5.14       $ 2.39       $ 3.11       $ 0.03    
Adjustments, net of tax   0.02       0.62       0.28       0.81    
Adjusted diluted earnings per share from continuing operations   $ 5.16       $ 3.01       $ 3.39       $ 0.84    
                 

(1) The tax effect of adjustments is the difference between the tax provision calculation on a GAAP basis and on an adjusted non-GAAP basis.

NON-GAAP FINANCIAL INFORMATION

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Because these measures are not measures of financial performance under GAAP and are susceptible to varying calculations, they may not be comparable to similarly titled measures for other companies.

We consider our non-GAAP financial measures to be performance measures and a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business. We make adjustments for certain non-GAAP financial measures related to amortization of intangibles from acquisitions and goodwill impairments. We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.

We measure the performance of our business using a variety of metrics, including earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations, adjusted EBITDA from continuing operations, EBITDA margin from continuing operations, adjusted EBITDA margin from continuing operations, adjusted diluted earnings per share from continuing operations and free cash flow. We also use EBITDA from continuing operations and pretax income of continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.

 

 

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Source: HRB Tax Group, Inc.