Strong Start to Tax Season Leads to Profitable Third Quarter
KANSAS CITY, Mo., Feb. 27 /PRNewswire/ -- H&R Block Inc. (NYSE: HRB) today reported earnings for the third quarter ended Jan. 31, 2001, of $5.6 million, or 6 cents per basic and diluted share, compared with a net loss of $7.1 million, or 7 cents per basic and diluted share, last year. Cash earnings improved $21.1 million over the prior year's quarter to $27.1 million, or 30 cents per basic share and 29 cents per diluted share, compared with earnings of $5.9 million, or 6 cents per basic and diluted share. The company defines cash earnings as net earnings from operations excluding the after-tax effect of amortization expense of acquired intangible assets.
"For the first time in our company's history, H&R Block's U.S. tax operations has reported a profit outside of the fourth quarter," said Mark A. Ernst, president and chief executive officer. "A surprising early start to the tax filing season, disciplined expense control, and strong improvements in our e-commerce business, along with strength in our mortgage business, contributed to these outstanding financial results.
"We effectively managed the early tax season surge, quickly mobilizing thousands of field staff and readily adapting to the increased business," Ernst added. "While this early tax filing growth has shifted some revenue from the fourth quarter to the third quarter, overall trends indicate that we are on track to deliver results for the full year that we believe will meet our previously announced revenue and earnings targets."
The company also experienced a strong start in its e-solutions business. Executing on its software and online tax strategy to profitably build unit sales, retail shipment of software grew 56 percent to 2.3 million units, while registered online tax users increased nearly three-fold during the quarter.
"We're pleased with our e-commerce results thus far," said Ernst. "Americans are finding that no matter how they wish to be served, H&R Block provides the most comprehensive array of tax products and services."
All domestic lines of business reported double-digit revenue growth for the quarter, led by U.S. tax operations' 37.6 percent increase over last year's third quarter. H&R Block's revenues for the quarter climbed 29 percent to $661.4 million, compared with $512.5 million for the same period last year.
The company's performance as measured by earnings before interest (including interest expense on acquisition debt, investment income and interest allocated to operating business units), taxes, depreciation and amortization (EBITDA), improved by $48.3 million to $88.7 million, a gain of 119 percent over the prior year's quarter. The pretax amortization expense of acquired intangible assets increased in the third quarter to $26.3 million from $17 million during the same period last year.
U.S. Tax Operations
H&R Block's U.S. tax operations reported revenues of $327.3 million, an increase of $89.5 million, or 37.6 percent, compared with $237.9 million in the same quarter a year ago. Pretax earnings for the segment improved $36.9 million to $7.4 million, compared to a pretax loss of $29.4 million last year. The segment's better than expected results were due to increases in both numbers of clients and average fees per client, strict cost management, and year-over-year improvements in e-commerce and participations in refund anticipation loans (RALs).
From Jan. 1 through Jan. 31, 2001, tax preparation and related fees from company-owned and franchised offices increased 36.8 percent compared with the same period last year, while the number of clients served by company-owned and franchised operations increased 25 percent. As of Jan. 31, 2001, H&R Block had filed 3.3 million federal returns electronically, representing a 27.5 percent increase over the prior year. Through the first month of tax season, 94.4 percent of returns processed by the company were filed electronically. The number of RALs processed by Block increased 18.9 percent to 1.7 million, compared with 1.4 million for the same period in 2000.
For the period Jan. 1 through Feb. 15, 2001, company-owned operations served 5.4 million clients, an increase of 7.5 percent over the same period ended Feb. 15, 2000. For the same period, tax preparation and related fees in company-owned tax offices increased 17.1 percent to $548.6 million.
Outlook for Remainder of Tax Season
"While we are very encouraged by our strong start this tax season, it's important to keep several points in mind when looking ahead to the fourth quarter," Ernst said. "Our analysis of early season data indicates the growth is attributable in part to a slight shift in the filing pattern from the first two weeks of February into late January. As a result, we do not expect to sustain the significant level of growth recorded in the third quarter during the remainder of the tax season. Our results for company-owned operations through Feb. 15 are more in line with our expectations for the start of the tax season and a better indicator of our overall tax season performance to date.
"Average fee increases will also level off in the fourth quarter, as our pricing increases were more heavily weighted toward the beginning of the tax season," Ernst explained. "However, we are benefiting from a mix of returns that includes slightly more complexity and a reduction in discounts. We expect some level of continuing benefit from fewer discounts.
"Finally, our strong start has not led us to lose sight of the fact that this year we have adopted a two-season marketing focus, which is directed at increasing the overall complexity of the clients we serve during the second half of the tax season," Ernst said. "While we are currently on track to realize our previously stated full year goals, our ultimate results from the tax season will depend heavily on the success of these marketing efforts."
International Tax Operations
International tax operations, which include Canada, Australia and the United Kingdom, generated revenues of $7.9 million, down 7.3 percent over last year partially due to the continued strength of the U.S. dollar. The pretax loss improved $1 million, or 13.9 percent, to $6.1 million, compared with $7.1 million a year ago. Careful cost control, particularly in Canadian operations, drove the improved results.
The financial services segment, comprised of mortgage and investment services operations, reported a 2.2 percent increase in pretax earnings over last year to $44.9 million, due primarily to strong results from mortgage operations, offset by lower earnings from investment services operations. Revenues rose 27.4 percent to $232.3 million, due in part to the inclusion of three months of operations from H&R Block Financial Advisors for the quarter, versus only two months last year.
Mortgage operations, which include Option One Mortgage Corporation and H&R Block Mortgage Corporation, reported pretax earnings of $38.3 million, a 53.3 percent increase over the prior year. Revenues rose $28.5 million, or 33.3 percent, to $114.2 million. The improved results are attributable to the volume and quality of loans originated and serviced by Option One, the pricing those loans generated, a positive interest rate environment, and continued cost control. These items as well as third-party off-balance sheet financing arrangements contributed to the 437 basis point year-over-year pretax operating margin improvement.
Option One and H&R Block Mortgage originated $1.6 billion in loans in the third quarter, an increase of 12.5 percent over the same period last year. At the end of the third quarter, Option One's servicing portfolio was approximately $17.5 billion, an increase of $7.1 billion, or 68 percent, over last year and an increase of $0.9 billion, or 5.4 percent over the second quarter of fiscal 2001.
Block's investment services operations, which consists primarily of H&R Block Financial Advisors Inc., contributed $118.1 million in revenues and $6.6 million in pretax earnings, a 22.1 percent increase and 65.2 percent decrease compared to the prior year, respectively. Pretax earnings include $1.1 million in one-time charges associated with staff reductions, as H&R Block Financial Advisors has actively managed its cost structure in the industry's slow trading environment.
The average commission rate per trade of $68.61 represents a 14.1 percent increase from $60.13 in the prior year's quarter and a 2.7 percent decrease compared with the last quarter's rate of $70.52. Total customer trades and customer daily average trades were consistent with the sequential second quarter results and declined approximately 40 percent over the prior year's very active levels.
The financial services segment reported solid cash flows. EBITDA increased $9.1 million to $65.8 million, or 16.1 percent over the prior year. Higher earnings primarily drove the increase.
Business services, which primarily includes RSM McGladrey Inc., reported pretax earnings of $1.1 million compared to $3.1 million last year. Revenues rose 12 percent to $92.7 million, driven by increased consulting and financial service fees. Business services reported a 3.2 percent improvement in EBITDA to $11.1 million, compared with $10.7 million last year.
Interest expense on acquisition debt increased $4.5 million to $24 million versus a year ago, due to higher interest rates and the full quarter inclusion of the financing costs associated with the acquisition of H&R Block Financial Advisors on Dec. 1, 1999.
For the nine months ended Jan. 31, 2001, H&R Block's revenues were $1.3 billion, up 54.4 percent from the same period a year ago. The net loss was $95.8 million, or $1.04 per share, compared with a net loss of $88.9 million, or 91 cents per share for the same nine-month period last year. Cash earnings improved 48.6 percent over the prior year's nine-month period with a loss of $32.7 million, or 35 cents per share, compared with a loss of $63.6 million, or 65 cents per share. EBITDA improved by $103.7 million to $55.6 million, compared with a loss of $48.1 million for the prior year's nine-month period.
The Board of Directors of H&R Block declared a quarterly dividend of 30 cents per share, payable April 2, 2001, to shareholders of record on March 12, 2001.
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 or exceed its revenue, earnings, client and pricing growth goals for fiscal year 2001, that the level of growth experienced in the third quarter and early tax season will continue throughout the remainder of the tax season and fiscal year, that average fees will continue at current levels or increase during the remainder of fiscal year 2001, of the success of the company's marketing efforts, of the continued strong performance of the company's mortgage operations, that the performance of the company's e-commerce initiatives will continue to improve, 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 wide range of financial products and services. In 2000, H&R Block served 19.2 million taxpayers -- more than any tax or accounting firm -- through its more than 10,000 offices located in the United States, Canada, Australia and the United Kingdom. H&R Block served another 1.8 million tax clients through its award-winning software program, Kiplinger TaxCut(R), and through its new 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 full 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. Quarterly results and other information are available on the company's Web site at www.hrblock.com .
H&R BLOCK, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited, amounts in thousands, except per share data
Three months ended January 31, 2001 2000 1999 Revenues $661,354 $512,507 $291,482 Earnings (loss) from continuing operations before income taxes (benefit) 9,816 (13,523) (4,588) Net earnings (loss) from continuing operations 5,645 (7,075) (2,845) Net loss from discontinued operations (less applicable income tax benefit of ($175)) - - (273) Net loss on sale of discontinued operations (less applicable income tax benefit of ($12,773)) - - (19,978) Net earnings (loss) $5,645 $(7,075) $(23,096) Basic net earnings (loss) per share: Net earnings (loss) from continuing operations $0.06 $(0.07) $(0.03) Net earnings (loss) $0.06 $(0.07) $(0.24) Basic shares outstanding 91,299 98,358 97,481 Diluted net earnings (loss) per share: Net earnings (loss) from continuing operations $0.06 $(0.07) $(0.03) Net earnings (loss) $0.06 $(0.07) $(0.24) Diluted shares outstanding 92,036 98,358 97,481 Nine months ended January 31, 2001 2000 1999 Revenues $1,302,938 $844,013 $447,668 Loss from continuing operations before income tax benefit (166,533) (145,477) (97,612) Net loss from continuing operations (95,756) (88,886) (60,540) Net loss from discontinued operations (less applicable income tax benefit of ($953)) - - (1,490) Net loss on sale of discontinued operations (less applicable income tax benefit of ($12,773)) - - (19,978) Net loss $(95,756) $(88,886) $(82,008) Basic net loss per share: Net loss from continuing operations $(1.04) $(0.91) $(0.60) Net loss $(1.04) $(0.91) $(0.82) Basic shares outstanding 91,988 97,962 100,526
Notes to Consolidated Statements of Operations
Basic and diluted net earnings per share is based on the weighted average
number of shares outstanding during each
Reclassifications have been made to prior years to conform with current
On December 1, 1999, the Company completed the acquisition of the
outstanding capital stock of Olde Financial Corporation and Financial
Marketing Services, Inc. (collectively, OLDE). The purchase price was
$850 million in cash plus net tangible book value payments of
$48.5 million. The acquisition was accounted for as a purchase and,
accordingly, OLDE's results are included since the date of the
acquisition. The acquisition was funded with short-term borrowings and
the issuance of $500 million in Senior Notes in the fourth quarter of
On August 2, 1999, the Company, through a subsidiary, RSM McGladrey, Inc.,
completed the purchase of substantially all of the non-attest assets of
McGladrey & Pullen, LLP. The purchase price was $240 million in cash
payments over four years and the assumption of certain pension liabilities
with a present value of $52.7 million. The acquisition was accounted for
as a purchase, and accordingly, results are included since the date of
On January 29, 1999, the Company completed the sale of its WebCard Visa
portfolio. The Company ultimately recorded a $20.9 million loss, net of
taxes, on the transaction. The Consolidated Statements of Operations for
the three and nine months ended January 31, 1999 reflect the Company's
Credit Card Operations segment as discontinued operations. Revenues from
discontinued operations for the three and nine months ended
January 31, 1999 were $7.8 million and $24.1 million, respectively.
During the nine months ended January 31, 2001, 2000 and 1999, the Company
issued shares of its common stock pursuant to provisions for exercise of
the Company's stock option plans as follows: 2001-106,775 shares;
2000-953,865 shares; 1999-1,996,012 shares. During the same periods, the
Company reacquired shares of its common stock as follows:
2001-6,816,098 shares at an aggregate cost of $222,894,000; 2000-721,800
shares at an aggregate cost of $32,366,000; 1999-11,792,500 shares at an
aggregate cost of $490,868,000.
H&R BLOCK, INC.
SELECTED OPERATIONAL INFORMATION
Unaudited, amounts in thousands
Three months ended January 31, Revenues Earnings (loss) 2001 2000 2001 2000 U.S. tax operations $327,310 $237,851 $7,438 $(29,427) International tax operations 7,857 8,478 (6,141) (7,134) Financial services 232,333 182,419 44,926 43,976 Business services 92,729 82,806 1,063 3,135 Unallocated corporate 1,125 953 (11,418) (6,671) Interest expense on acquisition debt - - (23,988) (19,451) $661,354 $512,507 11,880 (15,572) Investment income, net 1,099 1,517 Intercompany interest* (3,163) 532 9,816 (13,523) Income taxes (benefit) 4,171 (6,448) Net earnings (loss) $5,645 $(7,075) Nine months ended January 31, Revenues Earnings (loss) 2001 2000 2001 2000 U.S. tax operations $365,063 $270,649 $(167,635) $(184,160) International tax operations 27,655 27,259 (12,531) (15,299) Financial services 659,863 353,376 112,292 83,733 Business services 247,093 190,165 (2,731) 1,795 Unallocated corporate 3,264 2,564 (22,758) (13,448) Interest expense on acquisition debt - - (75,760) (31,916) $1,302,938 $844,013 (169,123) (159,295) Investment income, net 6,354 6,570 Intercompany interest* (3,764) 7,248 (166,533) (145,477) Income tax benefit (70,777) (56,591) Net loss $(95,756) $(88,886)
Intercompany interest represents net interest expense charged to financial related businesses for corporate cash that was borrowed to fund their operating activities and, in fiscal 2001, it also includes net unallocated interest expense attributable to commitment fees on the unused portion of the Company's $1.9 billion credit facility.
H&R Block, Inc.
Consolidated Balance Sheets
Unaudited, amounts in thousands, except share data
January 31, 2001 2000 ASSETS CURRENT ASSETS: Cash and cash equivalents $380,918 $275,740 Marketable securities -- available-for-sale 8,288 33,074 Marketable securities -- trading 42,690 45,872 Receivables from customers, brokers, dealers and clearing organizations, less allowance for doubtful accounts of $878 and $744 1,913,319 2,385,785 Receivables, less allowance for doubtful accounts of $37,042 and $37,474 1,072,466 1,248,065 Prepaid expenses and other current assets 182,149 163,121 TOTAL CURRENT ASSETS 3,599,830 4,151,657 INVESTMENTS AND OTHER ASSETS: Investments in available-for- sale marketable securities 273,385 221,670 Excess of cost over fair value of net tangible assets acquired, net of amortization 1,069,302 1,149,546 Other 354,947 178,903 1,697,634 1,550,119 PROPERTY AND EQUIPMENT, at cost less accumulated depreciation and amortization 245,059 219,594 $5,542,523 $5,921,370 LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES: Notes payable $1,626,806 $2,094,939 Accounts payable to customers, brokers and dealers 1,626,612 2,106,142 Accounts payable, accrued expenses and deposits 297,252 182,842 Accrued salaries, wages and payroll taxes 141,744 80,558 Accrued taxes on earnings 8,145 6,784 Current portion of long-term debt 50,419 60,207 TOTAL CURRENT LIABILITIES 3,750,978 4,531,472 LONG-TERM DEBT 869,249 356,283 OTHER NONCURRENT LIABILITIES 100,328 108,342 STOCKHOLDERS' EQUITY: Common stock, no par, stated value $.01 per share 1,089 1,089 Additional paid-in capital 419,517 417,311 Accumulated other comprehensive income (loss) (26,798) (17,229) Retained earnings 1,101,135 963,212 1,494,943 1,364,383 Less cost of 17,647,006 and 10,600,900 shares of common stock in treasury 672,975 439,110 821,968 925,273 $5,542,523 $5,921,370
H&R Block, Inc.
Consolidated Statements of Cash Flows
Unaudited, amounts in thousands
Nine months ended January 31, 2001 2000 Cash flows from operating activities: Net loss $(95,756) $(88,886) Adjustments to reconcile net loss to net cash used by operating activities: Depreciation and amortization 148,990 79,270 Net gain on sale of subsidiary (2,040) - Provision for bad debt 43,448 26,058 Accretion of acquisition liabilities 8,766 7,266 Changes in: Receivables from customers, brokers, dealers and clearing organizations 942,791 (423,288) Receivables (836,004) (519,942) Marketable securities - trading 2,713 7,413 Prepaid expenses and other current assets (53,877) (54,171) Accounts payable to customers, brokers and dealers (943,588) 403,954 Accounts payable, accrued expenses and deposits 74,541 (56,815) Accrued salaries, wages and payroll taxes (31,185) (81,032) Accrued taxes on earnings (204,753) (144,933) Other, net (2,396) (7,771) Net cash used in operating activities (948,350) (852,877) Cash flows from investing activities: Purchases of available-for-sale securities (5,413) (3,797) Maturities of available-for-sale securities 32,375 33,003 Purchases of property and equipment, net (44,669) (68,855) Payments made for business acquisitions, net of cash acquired (13,285) (960,518) Proceeds from sale of subsidiary 23,200 - Other, net (19,007) (9,837) Net cash used in investing activities (26,799) (1,010,004) Cash flows from financing activities: Repayments of notes payable (11,864,855) (31,187,422) Proceeds from issuance of notes payable 13,207,864 33,210,422 Payments on acquisition debt (67,643) (3,278) Dividends paid (80,433) (78,811) Payments to acquire treasury shares (222,894) (32,366) Proceeds from stock options exercised 3,019 36,178 Other, net 1,108 658 Net cash provided by financing activities 976,166 1,945,381 Net increase in cash and cash equivalents 1,017 82,500 Cash and cash equivalents at beginning of the period 379,901 193,240 Cash and cash equivalents at end of the period $380,918 $275,740 Supplementary cash flow data: Income taxes paid $123,296 $87,168 Interest paid 173,137 79,672
H&R Block, Inc.
Consolidated Statements of Operations
Unaudited, amounts in thousands, except per share data
Three Months Ended January 31, 2001 2000 Revenues: Service revenues $503,733 $406,564 Product sales 117,360 81,941 Royalties 28,633 16,124 Other income 11,628 7,878 661,354 512,507 Operating expenses: Employee compensation and benefits 305,404 230,943 Occupancy and equipment 63,717 63,842 Interest 68,048 50,271 Depreciation and amortization 52,848 36,539 Marketing and advertising 37,598 39,221 Supplies, freight and postage 19,539 26,755 Bad debt 29,194 15,937 Other 78,349 64,148 654,697 527,656 Operating earnings (loss) 6,657 (15,149) Other income: Investment income, net 1,099 1,517 Other, net 2,060 109 3,159 1,626 Earnings (loss) before income taxes (benefit) 9,816 (13,523) Income taxes (benefit) 4,171 (6,448) Net earnings (loss) $5,645 $(7,075) Basic net earnings (loss) per share: Net earnings (loss) $0.06 $(0.07) Basic shares outstanding 91,299 98,358 Diluted net earnings (loss) per share: Net earnings (loss) $0.06 $(0.07) Diluted shares outstanding 92,036 98,358
H&R Block, Inc.
Consolidated Statements of Operations
Unaudited, amounts in thousands, except per share data
Nine Months Ended January 31, 2001 2000 Revenues: Service revenues $1,009,831 $632,766 Product sales 225,429 176,182 Royalties 33,791 20,264 Other income 33,887 14,801 1,302,938 844,013 Operating expenses: Employee compensation and benefits 624,844 424,601 Occupancy and equipment 180,175 152,036 Interest 195,219 85,089 Depreciation and amortization 148,990 79,270 Marketing and advertising 62,100 59,076 Supplies, freight and postage 37,123 39,646 Bad debt 43,448 26,058 Other 185,983 130,643 1,477,882 996,419 Operating loss (174,944) (152,406) Other income: Investment income, net 6,354 6,570 Other, net 2,057 359 8,411 6,929 Loss before income tax benefit (166,533) (145,477) Income tax benefit (70,777) (56,591) Net loss $(95,756) $(88,886) Basic net loss per share: Net loss $(1.04) $(0.91) Basic shares outstanding 91,988 97,962 H&R Block, Inc. Financial Services Operating Data
H&R Block Financial Advisors, Inc. (Formerly Olde) *
For the three months ended 01/26/2001 01/28/2000 % Change 10/27/2000 Customer trades (000's) 599 1,013 -40.9% 626 Customer daily average trades 9,816 16,338 -39.9% 9,788 Average commission per trade $68.61 $60.13 14.1% $70.52 Number of active accounts (000's) 605 632 -4.2% 623 Average trades per active account per quarter 0.99 1.60 -38.3% 1.01 Average trades per active account per year (annualized) 3.96 6.41 -38.3% 4.02 Ending balance of assets under administration ($ bn's) $36.3 $41.2 -11.8% $39.0 Average assets per active account $60,028 $65,171 -7.9% $62,545 Ending debit balances ($ bn's) $1.9 $2.4 -19.4% $2.6 Ending credit balances ($ bn's) $0.9 $1.2 -19.8% $0.8 Ending balance of assets under management ($ bn's) $3.6 $3.5 4.0% $3.5
Option One Mortgage Corporation
For the three months ended 01/31/2001 01/31/2000 % Change 10/31/2000 Number of loans originated Wholesale 12,443 12,310 1.1% 11,900 Retail 2,424 1,376 76.2% 2,155 Total 14,867 13,686 8.6% 14,055 Volume of loans originated (000's) Wholesale $1,297,435 $1,252,236 3.6% $1,252,710 Retail 294,241 162,901 80.6% 247,424 Total $1,591,676 $1,415,137 12.5% $1,500,135 Loan sales $1,547,169 $1,416,999 9.2% $1,487,601 Servicing portfolio Number of loans serviced (000's) 172.6 104.2 65.6% 162.2 Servicing portfolio ($ bn's) $17.5 $10.4 68.0% $16.6
Data is provided for comparative purposes only; Olde was acquired on December 1, 1999.
H&R Block, Inc.
Preliminary U.S. Tax Operating Data
Period January 1 through January 31 and February 15
Amounts in thousands, except average charge and number of offices
For the period ended 01/31/2001 01/31/2000 % change
Tax preparation & related fees Company owned offices $226,806 $169,088 34.1% Franchised offices 124,140 87,385 42.1% $350,946 $256,473 36.8% Tax returns prepared Company owned offices 2,029 1,704 19.2% Franchised offices 1,214 917 32.4% 3,243 2,621 23.7% Total clients served Company owned offices 2,069 1,755 17.9% Franchised offices 1,303 1,004 29.8% E-commerce * 123 37 232.4% 3,495 2,796 25.0% Tax returns filed electronically** Company owned offices 1,977 1,654 19.5% Franchised offices 1,204 896 34.4% E-commerce * 117 37 216.2% 3,298 2,587 27.5% Percent filed electronically Company owned offices 95.6% 94.2% Franchised offices 92.4% 89.2% E-commerce * 95.1% 100.0% 94.4% 92.5% Average fee per client served Company owned offices $109.62 $96.35 13.8% Franchised offices 95.27 87.04 9.5% $104.08 $92.96 12.0% Refund anticipation loans Company owned offices 1,020 861 18.5% Franchised offices 647 542 19.6% E-commerce * 5 3 66.9% 1,672 1,406 18.9% Offices Company owned offices 5,060 5,162 -2.0% Franchised offices 4,012 4,048 -0.9% 9,072 9,210 -1.5% For the period ended 02/15/2001 02/15/2000 % change
Tax preparation & related fees Company owned offices $548,630 $468,391 17.1% Franchised offices
Tax returns prepared Company owned offices 4,824 4,594 5.1% Franchised offices
Total clients served Company owned offices 4,920 4,746 3.7% Franchised offices E-commerce * 501 298 68.1% Tax returns filed electronically** Company owned offices 4,591 4,335 5.9% Franchised offices E-commerce * 492 298 65.1% Percent filed electronically Company owned offices 93.3% 91.3% Franchised offices E-commerce * 98.2% 100.0% Average fee per client served Company owned offices $111.51 $98.69 13.0% Franchised offices
Refund anticipation loans Company owned offices 2,197 2,212 -0.7% Franchised offices 1,351 1,335 1.4% E-commerce * 22 15 46.9% 3,570 3,562 0.2% Offices Company owned offices 5,060 5,162 -2.0% Franchised offices 4,012 4,048 -0.9% 9,072 9,210 -1.5%
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: Media, Linda McDougall, 816-932-7542, Investors, Mark Barnett, 816-701-4443, both of H&R Block Inc./