Document


 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): December 6, 2018

H&R BLOCK, INC.
(Exact name of registrant as specified in charter)
MISSOURI
1-06089
44-0607856
(State or other jurisdiction of
(Commission File Number)
(I.R.S. Employer
incorporation or organization)
 
Identification No.)

One H&R Block Way, Kansas City, MO 64105
(Address of Principal Executive Offices) (Zip Code)

(816) 854-3000
(Registrant's telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
 








Item 2.02.    Results of Operations and Financial Condition.
On December 6, 2018, the Company issued a press release regarding the Company’s results of operations for the fiscal quarter ended October 31, 2018. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01.    Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number    Description
99.1    Press Release Issued December 6, 2018






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
H&R BLOCK, INC.
 
 
 
 
Date:
December 6, 2018
By:
/s/ Scott W. Andreasen
 
 
 
Scott W. Andreasen
 
 
 
Vice President and Secretary



Exhibit

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Exhibit 99.1
News Release
For Immediate Release: December 6, 2018
H&R Block Announces Fiscal 2019 Second Quarter Results; Introducing Upfront, Transparent Pricing and Virtual Tax Innovations for the Upcoming Tax Season
KANSAS CITY, Mo. - H&R Block, Inc. (NYSE: HRB) today released its financial results for the fiscal 2019 second quarter ended October 31, 2018. The company normally reports a fiscal second quarter loss due to the seasonality of its tax business. The fiscal second quarter typically represents less than 5 percent of annual revenues and less than 15 percent of annual expenses.
Fiscal Second Quarter Highlights1 
Fiscal second quarter financial results were in line with expectations.
Revenues increased $8 million, or 6 percent, to $149 million primarily due to increased Assisted tax preparation revenues and the timing of revenues related to the company's Tax Plus products.
Pretax loss from continuing operations improved 2 percent to $232 million; loss per share from continuing operations2 increased $0.12 to $0.83 due to a lower effective tax rate, which negatively impacts those fiscal quarters with a seasonal net loss.
The company reiterated its financial outlook for the full fiscal year.
"We’re implementing a number of initiatives for the upcoming tax season that will significantly improve the way clients interact with H&R Block, including our industry-leading announcement of upfront, transparent pricing in all of our channels," said Jeff Jones, H&R Block's president and chief executive officer. "This, combined with our innovative virtual tax offerings will help us deliver unique and better experiences to consumers, bring our brand promise to life, and allow us to deliver for the long term."


1 
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 fully diluted shares at the end of the corresponding period.










Fiscal 2019 Second Quarter Results From Continuing Operations
"The fiscal second quarter results reflect planned increases in expenses related to strategic investments being made in the business," said Tony Bowen, H&R Block's chief financial officer. "We are focused on executing the operational elements of our strategy for the upcoming tax season, and remain on track to achieve our financial outlook for the fiscal year."

(in millions, except EPS)
 
Q2 FY2019
 
Q2 FY2018
Revenue
 
$
149

 
$
141

Pretax Loss
 
$
(232
)
 
$
(236
)
Net Loss
 
$
(171
)
 
$
(148
)
Weighted-Avg. Shares - Diluted
 
205.5

 
209.1

EPS2
 
$
(0.83
)
 
$
(0.71
)
EBITDA3
 
$
(169
)
 
$
(170
)
 
 
 
 
 
Key Financial Metrics
Total revenues increased $8.0 million, or 5.7 percent, to $148.9 million primarily due to increased Assisted tax preparation revenues and the timing of revenues from Tax Identity Shield®, partially offset by lower international revenues related to fluctuations in exchange rates.
Total operating expenses increased $7.3 million, or 2.0 percent, to $364.1 million primarily due to increases in occupancy and compensation expenses, partially offset by lower depreciation and amortization and the timing of marketing expense.
Pretax loss improved $4.3 million, or 1.8 percent, to $232.0 million.
Loss per share from continuing operations increased $0.12, from $0.71 to $0.83, due to a lower effective tax rate, which negatively impacts those fiscal quarters with a seasonal net loss.
 
Dividends
As previously announced, a quarterly cash dividend of $0.25 per share is payable on January 2, 2019 to shareholders of record as of December 3, 2018. H&R Block has paid quarterly dividends consecutively since the company went public in 1962.
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 the fiscal 2019 second quarter results, future outlook, and a general business update will occur during the company’s previously announced fiscal second quarter earnings conference call for analysts, institutional investors, and shareholders. The call is scheduled for 8:30 a.m. Eastern time on De

3 The company reports non-GAAP financial measures of performance, including earnings before interest, tax, depreciation, and amortization (EBITDA) from continuing operations, EBITDA margin from continuing operations, and free cash flow, which it considers to be useful metrics for management and investors to evaluate and compare the ongoing operating performance of the company. See "About Non-GAAP Financial Information" below for more information regarding financial measures not prepared in accordance with generally accepted accounting principles (GAAP).



cember 6, 2018. To access the call, please dial the number below approximately 10 minutes prior to the scheduled starting time:
U.S./Canada (855) 702-5257 or International (213) 358-0868
Conference ID: 8661109
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 http://investors.hrblock.com. The presentation will be posted on the Webcasts and Presentations page at http://investors.hrblock.com following the conclusion of the call.
A replay of the call will be available beginning at 11:30 a.m. Eastern time on December 6, 2018, and continuing until January 6, 2019, by dialing (855) 859-2056 (U.S./Canada) or (404) 537-3406 (International). The conference ID is 8661109. The webcast will be available for replay beginning on December 7, 2018 and continuing for 90 days at http://investors.hrblock.com.
About H&R Block
H&R Block, Inc. (NYSE: HRB) is a global consumer tax services provider. Tax return preparation services are provided by professional tax preparers in approximately 12,000 company-owned and franchise retail tax offices worldwide, and through H&R Block tax software products for the DIY consumer. H&R Block also offers adjacent Tax Plus products and services. In fiscal 2018, H&R Block had annual revenues of over $3.1 billion with over 23 million tax returns prepared worldwide. For more information, visit the H&R Block Newsroom.
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" or "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. 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 fiscal year ended April 30, 2018 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. In addition, factors that may cause the company’s actual estimated effective tax rate to differ from estimates include the company’s actual results from operations compared to current estimates, future discrete items, changes in interpretations and assumptions the company has made, guidance from the Internal Revenue Service, SEC, or the Financial Accounting Standards Board about the Tax Legislation, and future actions of the company. 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.
For Further Information
Investor Relations:    Colby Brown, (816) 854-4559, colby.brown@hrblock.com
Media Relations:    Susan Waldron, (816) 854-5522, susan.waldron@hrblock.com


TABLES FOLLOW





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CONSOLIDATED STATEMENTS OF OPERATIONS
 
 
 
(unaudited, in 000s - except per share amounts)
 
 
 
Three months ended October 31,
 
Six months ended October 31,
 
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
 
REVENUES:
 
 
 
 
 
 
 
 
Service revenues
 
$
127,267

 
$
127,923

 
$
254,127

 
$
252,618

Royalty, product and other revenues
 
21,604

 
12,931

 
39,927

 
26,038

 
 
148,871

 
140,854

 
294,054

 
278,656

OPERATING EXPENSES:
 
 
 
 
 
 
 
 
Costs of revenues
 
250,815

 
240,019

 
472,375

 
467,734

Selling, general and administrative
 
113,319

 
116,846

 
219,059

 
212,095

Total operating expenses
 
364,134

 
356,865

 
691,434

 
679,829

 
 
 
 
 
 
 
 
 
Other income (expense), net
 
4,464

 
1,011

 
9,006

 
2,231

Interest expense on borrowings
 
(21,191
)
 
(21,265
)
 
(42,381
)
 
(42,542
)
Loss from continuing operations before income tax benefit
 
(231,990
)
 
(236,265
)
 
(430,755
)
 
(441,484
)
Income tax benefit
 
(61,053
)
 
(87,953
)
 
(111,021
)
 
(165,354
)
Net loss from continuing operations
 
(170,937
)
 
(148,312
)
 
(319,734
)
 
(276,130
)
Net loss from discontinued operations
 
(5,339
)
 
(5,254
)
 
(9,212
)
 
(8,003
)
NET LOSS
 
$
(176,276
)
 
$
(153,566
)
 
$
(328,946
)
 
$
(284,133
)
 
 
 
 
 
 
 
 
 
BASIC AND DILUTED LOSS PER SHARE:
 
 
 
 
 
 
 
 
Continuing operations
 
$
(0.83
)
 
$
(0.71
)
 
$
(1.55
)
 
$
(1.33
)
Discontinued operations
 
(0.03
)
 
(0.03
)
 
(0.04
)
 
(0.03
)
Consolidated
 
$
(0.86
)
 
$
(0.74
)
 
$
(1.59
)
 
$
(1.36
)
 
 
 
 
 
 
 
 
 
WEIGHTED AVERAGE BASIC AND DILUTED SHARES
 
205,520

 
209,065

 
206,596

 
208,500

 
 
 
 
 
 
 
 
 






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CONSOLIDATED BALANCE SHEETS
 
(unaudited, in 000s - except per share data)
 
As of
 
October 31, 2018
 
October 31, 2017
 
April 30, 2018
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
Cash and cash equivalents
 
$
600,799

 
$
180,997

 
$
1,544,944

Cash and cash equivalents - restricted
 
122,507

 
100,665

 
118,734

Receivables, net
 
61,286

 
77,750

 
146,774

Income taxes receivable
 
18,745

 

 
12,310

Prepaid expenses and other current assets
 
87,665

 
85,204

 
68,951

Total current assets
 
891,002

 
444,616

 
1,891,713

Property and equipment, net
 
241,772

 
262,226

 
231,888

Intangible assets, net
 
364,524

 
406,440

 
373,981

Goodwill
 
507,191

 
493,059

 
507,871

Deferred tax assets and income taxes receivable
 
130,987

 
9,205

 
34,095

Other noncurrent assets
 
97,820

 
101,015

 
101,401

Total assets
 
$
2,233,296

 
$
1,716,561

 
$
3,140,949

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
LIABILITIES:
 
 
 
 
 
 
Accounts payable and accrued expenses
 
$
114,393

 
$
114,875

 
$
251,975

Accrued salaries, wages and payroll taxes
 
43,396

 
42,897

 
141,499

Accrued income taxes and reserves for uncertain tax positions
 
94,257

 
43,879

 
263,050

Current portion of long-term debt
 

 
1,004

 
1,026

Deferred revenue and other current liabilities
 
183,675

 
190,522

 
186,101

Total current liabilities
 
435,721

 
393,177

 
843,651

Long-term debt
 
1,491,328

 
1,493,828

 
1,494,609

Deferred tax liabilities and reserves for uncertain tax positions
 
235,799

 
138,024

 
229,430

Deferred revenue and other noncurrent liabilities
 
101,773

 
104,305

 
179,548

Total liabilities
 
2,264,621

 
2,129,334

 
2,747,238

COMMITMENTS AND CONTINGENCIES
 
 
 
 
 
 
STOCKHOLDERS’ EQUITY:
 
 
 
 
 
 
Common stock, no par, stated value $.01 per share
 
2,420

 
2,462

 
2,462

Additional paid-in capital
 
759,235

 
753,423

 
760,250

Accumulated other comprehensive loss
 
(18,880
)
 
(14,222
)
 
(14,303
)
Retained earnings (deficit)
 
(64,291
)
 
(433,556
)
 
362,980

Less treasury shares, at cost
 
(709,809
)
 
(720,880
)
 
(717,678
)
Total stockholders' equity (deficiency)
 
(31,325
)
 
(412,773
)
 
393,711

Total liabilities and stockholders' equity
 
$
2,233,296

 
$
1,716,561

 
$
3,140,949

 
 
 
 
 
 
 






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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(unaudited, in 000s)
 
Six months ended October 31,
 
2018
 
2017
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
Net loss
 
$
(328,946
)
 
$
(284,133
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
Depreciation and amortization
 
81,925

 
88,390

Provision for bad debt
 
2,350

 
4,238

Deferred taxes
 
17,913

 
58,634

Stock-based compensation
 
11,839

 
11,627

Changes in assets and liabilities, net of acquisitions:
 
 
 
 
Receivables
 
75,324

 
77,958

Prepaid expenses and other current assets
 
(18,933
)
 
(19,283
)
Other noncurrent assets
 
9,147

 
8,984

Accounts payable and accrued expenses
 
(120,921
)
 
(85,846
)
Accrued salaries, wages and payroll taxes
 
(97,771
)
 
(141,491
)
Deferred revenue and other current liabilities
 
(10,408
)
 
3,775

Deferred revenue and other noncurrent liabilities
 
(70,606
)
 
(60,857
)
Income tax receivables, accrued income taxes and income tax reserves
 
(179,660
)
 
(296,023
)
Other, net
 
1,056

 
(14,430
)
Net cash used in operating activities
 
(627,691
)
 
(648,457
)
 
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
Capital expenditures
 
(66,422
)
 
(56,750
)
Payments made for business acquisitions, net of cash acquired
 
(24,549
)
 
(27,522
)
Franchise loans funded
 
(8,915
)
 
(10,939
)
Payments received on franchise loans
 
11,689

 
10,322

Other, net
 
4,993

 
5,474

Net cash used in investing activities
 
(83,204
)
 
(79,415
)
 
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
Dividends paid
 
(103,484
)
 
(100,082
)
Repurchase of common stock, including shares surrendered
 
(102,096
)
 
(7,581
)
Proceeds from exercise of stock options
 
1,746

 
27,522

Other, net
 
(22,434
)
 
(26,717
)
Net cash used in financing activities
 
(226,268
)
 
(106,858
)
 
 
 
 
 
Effects of exchange rate changes on cash
 
(3,209
)
 
(1,147
)
 
 
 
 
 
Net decrease in cash, cash equivalents and restricted cash
 
(940,372
)
 
(835,877
)
Cash, cash equivalents and restricted cash, beginning of period
 
1,663,678

 
1,117,539

Cash, cash equivalents and restricted cash, end of period
 
$
723,306

 
$
281,662

 
 
 
 
 
SUPPLEMENTARY CASH FLOW DATA:
 
 
 
 
Income taxes paid, net of refunds received
 
$
50,197

 
$
76,451

Interest paid on borrowings
 
39,902

 
39,902

Accrued additions to property and equipment
 
4,765

 
3,874

 
 
 
 
 






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FINANCIAL RESULTS
 
(unaudited, in 000s - except per share amounts)
 
 
 
Three months ended October 31,
 
Six months ended October 31,
 
 
2018
 
2017
 
2018
 
2017
REVENUES:
 
 
 
 
 
 
 
 
U.S. assisted tax preparation
 
$
41,652

 
$
36,665

 
$
72,756

 
$
66,628

U.S. royalties
 
8,062

 
7,008

 
15,633

 
13,975

U.S. DIY tax preparation
 
2,994

 
4,263

 
5,775

 
7,489

International revenues
 
45,497

 
47,934

 
84,676

 
88,351

Revenues from Refund Transfers
 
560

 
1,135

 
1,984

 
3,951

Revenues from Emerald Card®
 
9,478

 
9,180

 
23,724

 
24,167

Revenues from Peace of Mind® Extended Service Plan
 
24,318

 
24,585

 
60,895

 
56,528

Revenues from Tax Identity Shield®
 
5,243

 
257

 
9,984

 
511

Interest and fee income on Emerald Advance
 
397

 
594

 
844

 
1,258

Other
 
10,670

 
9,233

 
17,783

 
15,798

 
 
148,871

 
140,854

 
294,054

 
278,656

Compensation and benefits:
 
 
 
 
 
 
 
 
Field wages
 
59,096

 
57,716

 
109,028

 
105,839

Other wages
 
50,046

 
46,723

 
97,868

 
89,920

Benefits and other compensation
 
24,178

 
23,583

 
47,109

 
44,228

 
 
133,320

 
128,022

 
254,005

 
239,987

Occupancy
 
104,880

 
94,907

 
195,606

 
185,198

Marketing and advertising
 
8,586

 
11,562

 
15,480

 
18,666

Depreciation and amortization
 
41,493

 
44,792

 
81,925

 
88,390

Bad debt
 
188

 
1,779

 
(670
)
 
4,238

Supplies
 
3,189

 
4,368

 
5,393

 
7,102

Other
 
72,478

 
71,435

 
139,695

 
136,248

Total operating expenses
 
364,134

 
356,865

 
691,434

 
679,829

 
 
 
 
 
 
 
 
 
Other income (expense), net
 
4,464

 
1,011

 
9,006

 
2,231

Interest expense on borrowings
 
(21,191
)
 
(21,265
)
 
(42,381
)
 
(42,542
)
Pretax loss
 
(231,990
)
 
(236,265
)
 
(430,755
)
 
(441,484
)
Income tax benefit
 
(61,053
)
 
(87,953
)
 
(111,021
)
 
(165,354
)
Net loss from continuing operations
 
(170,937
)
 
(148,312
)
 
(319,734
)
 
(276,130
)
Net loss from discontinued operations
 
(5,339
)
 
(5,254
)
 
(9,212
)
 
(8,003
)
NET LOSS
 
$
(176,276
)
 
$
(153,566
)
 
$
(328,946
)
 
$
(284,133
)
 
 
 
 
 
 
 
 
 
BASIC AND DILUTED LOSS PER SHARE:
 
 
 
 
 
 
 
 
Continuing operations
 
$
(0.83
)
 
$
(0.71
)
 
$
(1.55
)
 
$
(1.33
)
Discontinued operations
 
(0.03
)
 
(0.03
)
 
(0.04
)
 
(0.03
)
Consolidated
 
$
(0.86
)
 
$
(0.74
)
 
$
(1.59
)
 
$
(1.36
)
 
 
 
 
 
 
 
 
 
Weighted average basic and diluted shares
 
205,520

 
209,065

 
206,596

 
208,500

 
 
 
 
 
 
 
 
 
EBITDA from continuing operations (1)
 
$
(169,306
)
 
$
(170,208
)
 
$
(306,449
)
 
$
(310,552
)
 
 
 
 
 
 
 
 
 
(1) 
See "Non-GAAP Financial Information" for a reconciliation of non-GAAP measures.






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Three months ended October 31,
 
Six months ended October 31,
NON-GAAP FINANCIAL MEASURE - EBITDA
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
 
Net loss - as reported
 
$
(176,276
)
 
$
(153,566
)
 
$
(328,946
)
 
$
(284,133
)
Discontinued operations, net
 
5,339

 
5,254

 
9,212

 
8,003

Net loss from continuing operations - as reported
 
(170,937
)
 
(148,312
)
 
(319,734
)
 
(276,130
)
Add back:
 
 
 
 
 
 
 
 
Income taxes of continuing operations
 
(61,053
)
 
(87,953
)
 
(111,021
)
 
(165,354
)
Interest expense of continuing operations
 
21,191

 
21,265

 
42,381

 
42,542

Depreciation and amortization of continuing operations
 
41,493

 
44,792

 
81,925

 
88,390

 
 
1,631

 
(21,896
)
 
13,285

 
(34,422
)
 
 
 
 
 
 
 
 
 
EBITDA from continuing operations
 
$
(169,306
)
 
$
(170,208
)
 
$
(306,449
)
 
$
(310,552
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended October 31,
 
Six months ended October 31,
Supplemental Information
 
2018
 
2017
 
2018
 
2017
 
 
 
 
 
 
 
 
 
Stock-based compensation expense:
 
 
 
 
 
 
 
 
Pretax
 
$
7,480

 
$
6,811

 
$
11,839

 
$
11,627

After-tax
 
5,715

 
4,402

 
8,989

 
7,525

Amortization of intangible assets:
 
 
 
 
 
 
 
 
Pretax
 
$
17,585

 
$
19,438

 
$
35,724

 
$
38,673

After-tax
 
13,503

 
12,557

 
27,125

 
25,029

 
 
 
 
 
 
 
 
 
NON-GAAP FINANCIAL INFORMATION
The accompanying press release contains non-GAAP financial measures. 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 may consider whether 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 EBITDA from continuing operations, EBITDA margin from continuing operations, and free cash flow. We also use EBITDA from continuing operations and pretax income from continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.