H&R Block Reports Interim Tax Season Data Through March 31
Re-Affirms FY02 Earnings Guidance
Reporting interim results for the current tax season, H&R Block Inc. (NYSE: HRB) said tax preparation and related fees from its tax businesses are up 10.6 percent through March 31. The company remains on track to meet expectations set by its previously announced guidance for revenue and earnings.H&R Block has served 14.9 million clients for the current tax season through March 31, an increase of 2.5 percent compared to the same period last year. The company reported $1.6 billion in fees from tax preparation and related services. The average fee per client served rose 8.9 percent to $118.50.
"We're pleased that our results through the end of March remain on track. Current filing trends suggest that our tax businesses will meet their previously announced revenue and earnings goals for the full year," said Mark A. Ernst, president and chief executive officer. "This year, the latter half of March included three Sundays, one of which was Easter. This left us with fewer active client days than in the comparable period last year. That's why our revenues in the last 15 days of March were lower than our full season trend," Ernst said.
On May 1, the company plans to announce preliminary results for the tax season through April 16. Fiscal 2002 fourth quarter and year-end results are scheduled to be announced June 12.
Through March 31, tax professionals in H&R Block offices prepared 13.6 million returns, an increase of 3 percent. During this period, H&R Block filed 13.2 million federal returns electronically, representing a 6.7 percent increase over the prior year. So far this tax season, 88.5 percent of returns processed by the company were filed electronically.
When H&R Block announced its third quarter earnings 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.
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 March 31, 2002 will continue throughout the remainder of the tax season and fiscal year, and that actual financial results for fiscal year 2002 will fall within the guidance provided by the company; 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 3/1-3/15 3/16-3/31 YTD 3/31
Tax preparation
& related fees
Fiscal year
2002
Company
owned
offices $259,783 $355,534 $156,840 $145,826 $136,105 $1,054,088
Franchised
offices 149,078 199,762 91,427 73,205 65,591 579,063
$408,861 $555,296 $248,267 $219,031 $201,696 $1,633,151
Fiscal year
2001
Company
owned
offices $226,830 $321,949 $144,275 $129,435 $136,286 $958,775
Franchised
offices 124,116 181,301 80,551 67,984 64,285 518,237
$350,946 $503,250 $224,826 $197,419 $200,571 $1,477,012
Percent
change
Company
owned
offices 14.5% 10.4% 8.7% 12.7% -0.1% 9.9%
Franchised
offices 20.1% 10.2% 13.5% 7.7% 2.0% 11.7%
Total 16.5% 10.3% 10.4% 10.9% 0.6% 10.6%
Tax returns
prepared
Fiscal year
2002
Company owned
offices 2,129 2,873 1,253 1,094 976 8,325
Franchised
offices 1,354 1,815 837 661 562 5,229
3,483 4,688 2,090 1,755 1,538 13,554
Fiscal year
2001
Company owned
offices 2,029 2,796 1,231 1,071 1,065 8,192
Franchised
offices 1,214 1,740 773 655 588 4,970
3,243 4,536 2,004 1,726 1,653 13,162
Percent change
Company owned
offices 4.9% 2.8% 1.8% 2.1% -8.4% 1.6%
Franchised
offices 11.5% 4.3% 8.3% 0.9% -4.4% 5.2%
Total 7.4% 3.4% 4.3% 1.7% -7.0% 3.0%
Total clients served
Fiscal year 2002
Company owned
offices 2,149 2,902 1,264 1,102 981 8,398
Franchised
offices 1,406 1,877 860 672 569 5,384
E-commerce * 143 414 219 173 151 1,100
3,698 5,193 2,343 1,947 1,701 14,882
Fiscal year 2001
Company owned
offices 2,069 2,852 1,252 1,084 1,073 8,330
Franchised
offices 1,303 1,853 812 675 602 5,245
E-commerce * 109 367 202 150 122 950
3,481 5,072 2,266 1,909 1,797 14,525
Percent change
Company owned
offices 3.9% 1.8% 1.0% 1.7% -8.6% 0.8%
Franchised
offices 7.9% 1.3% 5.9% -0.4% -5.5% 2.7%
E-commerce * 31.2% 12.8% 8.4% 15.3% 23.8% 15.8%
Total 6.2% 2.4% 3.4% 2.0% -5.3% 2.5%
Tax returns filed
electronically**
Fiscal year 2002
Company owned
offices 2,081 2,726 1,109 911 775 7,602
Franchised
offices 1,333 1,675 693 480 375 4,556
E-commerce * 119 382 214 165 140 1,020
3,533 4,783 2,016 1,556 1,290 13,178
Fiscal year
2001
Company owned
offices 1,977 2,613 1,065 846 794 7,295
Franchised
offices 1,204 1,578 597 429 342 4,150
E-commerce * 96 352 194 146 116 904
3,277 4,543 1,856 1,421 1,252 12,349
Percent change
Company owned
offices 5.3% 4.3% 4.1% 7.7% -2.4% 4.2%
Franchised
offices 10.7% 6.2% 16.1% 11.9% 9.6% 9.8%
E-commerce * 24.0% 8.5% 10.3% 13.0% 20.7% 12.8%
Total 7.8% 5.3% 8.6% 9.5% 3.0% 6.7%
Percent filed
electronically
Fiscal year 2002
Company owned
offices 96.8% 93.9% 87.7% 82.7% 79.0% 90.5%
Franchised
offices 94.8% 89.2% 80.6% 71.4% 65.9% 84.6%
E-commerce * 83.2% 92.3% 97.7% 95.4% 92.7% 92.7%
95.5% 92.1% 86.0% 79.9% 75.8% 88.5%
Fiscal year
2001
Company owned
offices 95.6% 91.6% 85.1% 78.0% 74.0% 87.6%
Franchised
offices 92.4% 85.2% 73.5% 63.6% 56.8% 79.1%
E-commerce * 88.1% 95.9% 96.0% 97.3% 95.1% 95.2%
94.1% 89.6% 81.9% 74.4% 69.7% 85.0%
Average fee per
client served
Fiscal year
2002
Company owned
offices $120.89 $122.51 $124.08 $132.33 $138.74 $125.52
Franchised
offices 106.03 106.43 106.31 108.94 115.27 107.55
$115.01 $116.20 $116.89 $123.47 $130.13 $118.50
Fiscal year
2001
Company owned
offices $109.63 $112.89 $115.24 $119.40 $127.01 $115.10
Franchised
offices 95.25 97.84 99.20 100.72 106.79 98.81
$104.08 $106.96 $108.93 $112.23 $119.74 $108.80
Percent change
Company owned
offices 10.3% 8.5% 7.7% 10.8% 9.2% 9.1%
Franchised
offices 11.3% 8.8% 7.2% 8.2% 7.9% 8.9%
Total 10.5% 8.6% 7.3% 10.0% 8.7% 8.9%
Refund anticipation
loans
Fiscal year 2002
Company owned
offices 1,196 1,318 298 165 99 3,076
Franchised
offices 767 824 172 89 49 1,901
E-commerce * 8 17 7 5 4 41
1,971 2,159 477 259 152 5,018
Fiscal year
2001
Company owned
offices 1,020 1,177 272 152 94 2,715
Franchised
offices 647 704 150 79 45 1,625
E-commerce * 5 17 8 5 3 38
1,672 1,898 430 236 142 4,378
Percent change
Company
owned
offices 17.3% 12.0% 9.6% 8.6% 5.3% 13.3%
Franchised
offices 18.6% 17.1% 14.7% 12.7% 8.9% 17.0%
E-commerce * 60.0% 0.0% -12.5% 0.0% 33.3% 7.9%
Total 17.9% 13.8% 10.9% 9.7% 7.0% 14.6%
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 for H&R Block Inc. URL: http://www.hrblock.com
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