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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): March 7, 2019

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 March 7, 2019, the Company issued a press release regarding the Company’s results of operations for the fiscal quarter ended January 31, 2019. 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 March 7, 2019





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:
March 7, 2019
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: March 7, 2019
H&R Block Announces Fiscal 2019 Third Quarter Results, Reiterates Financial Outlook for Fiscal Year
KANSAS CITY, Mo. - H&R Block, Inc. (NYSE: HRB) today released its U.S. tax return volume through February 28, 2019 and financial results for the fiscal 2019 third quarter ended January 31, 2019. The company normally reports a fiscal third quarter loss due to the seasonality of its tax business.
Tax Season and Fiscal Third Quarter Highlights1 
▪
Delay in tax returns filed industry wide impacted fiscal third quarter results; company reiterates its financial outlook for the full fiscal year.
▪
H&R Block total U.S. returns declined through February 28, as growth in DIY returns was offset by a decline in Assisted returns; the decline in Assisted returns was anticipated due to the discontinuation of the Free Federal 1040EZ promotion.
▪
Revenues for the fiscal third quarter ended January 31, 2019 decreased $20 million, or 4 percent, to $468 million primarily due to a delay in overall industry filings.
▪
Pretax loss from continuing operations increased 31 percent to $159 million; however, loss per share from continuing operations2 improved from $1.16 to $0.58 due to the impact of corporate tax rate changes in the prior year.
Tax Season Results3 
H&R Block total U.S. return volume decreased 1.2% through February 28, as an increase in DIY returns of 6.4% was offset by a 6.5% decrease in Assisted returns. On a comparable basis with the most recent IRS data for this tax season, the company grew market share in DIY due to product enhancements and improved conversion. In Assisted, when comparing to the most recent IRS data for this tax season, the business was down modestly in market share, which was expected due to the discontinuation of its Free Federal 1040EZ promotion.
"The significant improvements we've made across our business have resulted in increased client satisfaction scores related to our new upfront and transparent pricing, third party accolades for our DIY products, and growth in our virtual offerings so far this tax season," said Jeff Jones, H&R Block's president and chief executive officer. "H&R Block is leading the way in the tax industry with offerings that span the full spectrum of tax preparation, whether clients want little to no help, complete in-person assistance, or anything in between."



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.
3 Volume changes to prior year noted in this paragraph and in the table attached to this release are based on a date-to-date basis. Comparisons to IRS data are on a day-to-day basis as of February 22, 2019.











Fiscal 2019 Third Quarter Results From Continuing Operations
"The slow start to the tax season for the industry impacted the timing of our business, lowering financial results for our fiscal third quarter," said Tony Bowen, H&R Block's chief financial officer. "We remain on track with our strategic and operational plans and expect to achieve our financial outlook for the fiscal year."

(in millions, except EPS)
 
Q3 FY2019
 
Q3 FY2018
Revenue
 
$
468

 
$
488

Pretax Loss
 
$
(159
)
 
$
(121
)
Net Loss
 
$
(120
)
 
$
(243
)
Weighted-Avg. Shares - Diluted
 
205.5

 
209.1

EPS2
 
$
(0.58
)
 
$
(1.16
)
EBITDA4
 
$
(92
)
 
$
(48
)
 
 
 
 
 
Key Financial Metrics
▪
Total revenues decreased $20.0 million, or 4.1 percent, to $468.4 million primarily due to lower Assisted tax preparation revenues and royalties as a result of the delay in overall filings with the IRS.
▪
Total operating expenses increased $20.8 million, or 3.5 percent, to $606.5 million primarily due to technology spend related to long-term initiatives and marketing, bad debt, and supplies expense.
▪
Pretax loss increased $37.9 million, or 31.3 percent, to $158.7 million.
▪
Loss per share from continuing operations improved from $1.16 to $0.58, due to the impact of corporate tax rate changes in the prior year. These changes resulted in an income tax expense in the third quarter of fiscal 2018, as opposed to an income tax benefit, which is customary in fiscal quarters in which the company has a seasonal pretax loss.
 
Dividends
As previously announced, a quarterly cash dividend of $0.25 per share is payable on April 1, 2019 to shareholders of record as of March 18, 2019. 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 third quarter results, outlook, and a general business update will occur during the company’s previously announced fiscal third quarter earnings conference call for analysts, institutional investors, and shareholders. The call is scheduled for 8:30 a.m. Eastern time on March 7,

4 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).


2019. 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: 5364734
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 March 7, 2019, and continuing until April 7, 2019, by dialing (855) 859-2056 (U.S./Canada) or (404) 537-3406 (International). The conference ID is 5364734. The webcast will be available for replay beginning on March 8, 2019 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, 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 January 31,
 
Nine months ended January 31,
 
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
REVENUES:
 
 
 
 
 
 
 
 
Service revenues
 
$
373,659

 
$
388,771

 
$
627,786

 
$
641,389

Royalty, product and other revenues
 
94,725

 
99,655

 
134,652

 
125,693

 
 
468,384

 
488,426

 
762,438

 
767,082

OPERATING EXPENSES:
 
 
 
 
 
 
 
 
Costs of revenues
 
421,026

 
416,601

 
893,401

 
884,335

Selling, general and administrative
 
185,458

 
169,098

 
404,517

 
381,193

Total operating expenses
 
606,484

 
585,699

 
1,297,918

 
1,265,528

 
 
 
 
 
 
 
 
 
Other income (expense), net
 
2,269

 
1,028

 
11,275

 
3,259

Interest expense on borrowings
 
(22,833
)
 
(24,560
)
 
(65,214
)
 
(67,102
)
Loss from continuing operations before income taxes (benefit)
 
(158,664
)
 
(120,805
)
 
(589,419
)
 
(562,289
)
Income taxes (benefit)
 
(38,885
)
 
122,120

 
(149,906
)
 
(43,234
)
Net loss from continuing operations
 
(119,779
)
 
(242,925
)
 
(439,513
)
 
(519,055
)
Net loss from discontinued operations
 
(6,675
)
 
(2,720
)
 
(15,887
)
 
(10,723
)
NET LOSS
 
$
(126,454
)
 
$
(245,645
)
 
$
(455,400
)
 
$
(529,778
)
 
 
 
 
 
 
 
 
 
BASIC AND DILUTED LOSS PER SHARE:
 
 
 
 
 
 
 
 
Continuing operations
 
$
(0.58
)
 
$
(1.16
)
 
$
(2.13
)
 
$
(2.49
)
Discontinued operations
 
(0.04
)
 
(0.02
)
 
(0.08
)
 
(0.05
)
Consolidated
 
$
(0.62
)
 
$
(1.18
)
 
$
(2.21
)
 
$
(2.54
)
 
 
 
 
 
 
 
 
 
WEIGHTED AVERAGE BASIC AND DILUTED SHARES
 
205,532

 
209,080

 
206,242

 
208,693

 
 
 
 
 
 
 
 
 





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CONSOLIDATED BALANCE SHEETS
 
(unaudited, in 000s - except per share data)
 
As of
 
January 31, 2019
 
January 31, 2018
 
April 30, 2018
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
Cash and cash equivalents
 
$
203,226

 
$
187,366

 
$
1,544,944

Cash and cash equivalents - restricted
 
101,903

 
83,033

 
118,734

Receivables, net
 
758,217

 
791,618

 
146,774

Income taxes receivable
 
36,486

 
72,775

 
12,310

Prepaid expenses and other current assets
 
134,820

 
149,349

 
68,951

Total current assets
 
1,234,652

 
1,284,141

 
1,891,713

Property and equipment, net
 
220,505

 
249,911

 
231,888

Intangible assets, net
 
356,952

 
390,993

 
373,981

Goodwill
 
520,005

 
504,789

 
507,871

Deferred tax assets and income taxes receivable
 
141,366

 
25,305

 
34,095

Other noncurrent assets
 
95,326

 
106,161

 
101,401

Total assets
 
$
2,568,806

 
$
2,561,300

 
$
3,140,949

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
LIABILITIES:
 
 
 
 
 
 
Accounts payable and accrued expenses
 
$
202,101

 
$
163,653

 
$
251,975

Accrued salaries, wages and payroll taxes
 
140,902

 
135,626

 
141,499

Accrued income taxes and reserves for uncertain tax positions
 
49,009

 
164,246

 
263,050

Current portion of long-term debt
 
—

 
1,015

 
1,026

Deferred revenue and other current liabilities
 
195,634

 
201,988

 
186,101

Total current liabilities
 
587,646

 
666,528

 
843,651

Long-term debt and line of credit borrowings
 
1,876,989

 
2,284,231

 
1,494,609

Deferred tax liabilities and reserves for uncertain tax positions
 
214,217

 
201,384

 
229,430

Deferred revenue and other noncurrent liabilities
 
103,545

 
107,226

 
179,548

Total liabilities
 
2,782,397

 
3,259,369

 
2,747,238

COMMITMENTS AND CONTINGENCIES
 
 
 
 
 
 
STOCKHOLDERS’ EQUITY:
 
 
 
 
 
 
Common stock, no par, stated value $.01 per share
 
2,415

 
2,462

 
2,462

Additional paid-in capital
 
764,982

 
758,361

 
760,250

Accumulated other comprehensive loss
 
(17,642
)
 
(9,374
)
 
(14,303
)
Retained earnings (deficit)
 
(254,277
)
 
(729,578
)
 
362,980

Less treasury shares, at cost
 
(709,069
)
 
(719,940
)
 
(717,678
)
Total stockholders' equity (deficiency)
 
(213,591
)
 
(698,069
)
 
393,711

Total liabilities and stockholders' equity
 
$
2,568,806

 
$
2,561,300

 
$
3,140,949

 
 
 
 
 
 
 





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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(unaudited, in 000s)
 
Nine months ended January 31,
 
2019
 
2018
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
Net loss
 
$
(455,400
)
 
$
(529,778
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
Depreciation and amortization
 
126,013

 
136,878

Provision for bad debt
 
35,009

 
33,429

Deferred taxes
 
20,557

 
113,345

Stock-based compensation
 
18,009

 
17,065

Changes in assets and liabilities, net of acquisitions:
 
 
 
 
Receivables
 
(640,482
)
 
(651,200
)
Prepaid expenses and other current assets
 
(66,497
)
 
(83,201
)
Other noncurrent assets
 
9,662

 
8,310

Accounts payable and accrued expenses
 
(47,510
)
 
(36,608
)
Accrued salaries, wages and payroll taxes
 
(465
)
 
(49,255
)
Deferred revenue and other current liabilities
 
3,990

 
10,113

Deferred revenue and other noncurrent liabilities
 
(70,794
)
 
(58,695
)
Income tax receivables, accrued income taxes and income tax reserves
 
(277,240
)
 
(255,650
)
Other, net
 
(2,308
)
 
(12,454
)
Net cash used in operating activities
 
(1,347,456
)
 
(1,357,701
)
 
 
 
 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
Capital expenditures
 
(79,982
)
 
(77,865
)
Payments made for business acquisitions, net of cash acquired
 
(42,428
)
 
(39,397
)
Franchise loans funded
 
(16,875
)
 
(20,226
)
Payments received on franchise loans
 
15,149

 
13,391

Other, net
 
4,877

 
1,524

Net cash used in investing activities
 
(119,259
)
 
(122,573
)
 
 
 
 
 
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
Repayments of line of credit borrowings
 
(230,000
)
 
(40,000
)
Proceeds from line of credit borrowings
 
615,000

 
830,000

Dividends paid
 
(154,866
)
 
(150,258
)
Repurchase of common stock, including shares surrendered
 
(102,152
)
 
(7,746
)
Proceeds from exercise of stock options
 
2,527

 
28,268

Other, net
 
(20,126
)
 
(28,922
)
Net cash provided by financing activities
 
110,383

 
631,342

 
 
 
 
 
Effects of exchange rate changes on cash
 
(2,217
)
 
1,792

 
 
 
 
 
Net decrease in cash, cash equivalents and restricted cash
 
(1,358,549
)
 
(847,140
)
Cash, cash equivalents and restricted cash, beginning of period
 
1,663,678

 
1,117,539

Cash, cash equivalents and restricted cash, end of period
 
$
305,129

 
$
270,399

 
 
 
 
 
SUPPLEMENTARY CASH FLOW DATA:
 
 
 
 
Income taxes paid, net of refunds received
 
$
103,789

 
$
102,755

Interest paid on borrowings
 
55,581

 
57,834

Accrued additions to property and equipment
 
2,241

 
1,078

Accrued purchase of common stock
 
12,301

 
—

 
 
 
 
 





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FINANCIAL RESULTS
 
(unaudited, in 000s - except per share amounts)
 
 
 
Three months ended January 31,
 
Nine months ended January 31,
 
 
2019
 
2018
 
2019
 
2018
REVENUES:
 
 
 
 
 
 
 
 
U.S. assisted tax preparation
 
$
256,813

 
$
267,328

 
$
329,569

 
$
333,956

U.S. royalties
 
42,265

 
45,420

 
57,898

 
59,395

U.S. DIY tax preparation
 
31,885

 
31,322

 
37,660

 
38,811

International revenues
 
12,304

 
12,308

 
96,980

 
100,659

Revenues from Refund Transfers
 
47,482

 
50,770

 
49,466

 
54,721

Revenues from Emerald Card®
 
14,980

 
16,125

 
38,704

 
40,292

Revenues from Peace of Mind® Extended Service Plan
 
16,596

 
19,967

 
77,491

 
76,495

Revenues from Tax Identity Shield®
 
7,655

 
6,818

 
17,639

 
7,329

Interest and fee income on Emerald AdvanceTM
 
30,924

 
31,075

 
31,768

 
32,333

Other
 
7,480

 
7,293

 
25,263

 
23,091

 
 
468,384

 
488,426

 
762,438

 
767,082

Compensation and benefits:
 
 
 
 
 
 
 
 
Field wages
 
153,764

 
156,027

 
262,792

 
261,866

Other wages
 
54,243

 
50,717

 
152,111

 
140,637

Benefits and other compensation
 
42,778

 
42,156

 
89,887

 
86,384

 
 
250,785

 
248,900

 
504,790

 
488,887

Occupancy (1)
 
94,407

 
97,557

 
290,013

 
282,755

Marketing and advertising
 
72,876

 
64,209

 
88,356

 
82,875

Depreciation and amortization
 
44,088

 
48,488

 
126,013

 
136,878

Bad debt
 
33,861

 
29,191

 
33,191

 
33,429

Supplies
 
9,950

 
4,950

 
15,343

 
12,052

Other (1)
 
100,517

 
92,404

 
240,212

 
228,652

Total operating expenses
 
606,484

 
585,699

 
1,297,918

 
1,265,528

 
 
 
 
 
 
 
 
 
Other income (expense), net
 
2,269

 
1,028

 
11,275

 
3,259

Interest expense on borrowings
 
(22,833
)
 
(24,560
)
 
(65,214
)
 
(67,102
)
Pretax loss
 
(158,664
)
 
(120,805
)
 
(589,419
)
 
(562,289
)
Income taxes (benefit)
 
(38,885
)
 
122,120

 
(149,906
)
 
(43,234
)
Net loss from continuing operations
 
(119,779
)
 
(242,925
)
 
(439,513
)
 
(519,055
)
Net loss from discontinued operations
 
(6,675
)
 
(2,720
)
 
(15,887
)
 
(10,723
)
NET LOSS
 
$
(126,454
)
 
$
(245,645
)
 
$
(455,400
)
 
$
(529,778
)
 
 
 
 
 
 
 
 
 
BASIC AND DILUTED LOSS PER SHARE:
 
 
 
 
 
 
 
 
Continuing operations
 
$
(0.58
)
 
$
(1.16
)
 
$
(2.13
)
 
$
(2.49
)
Discontinued operations
 
(0.04
)
 
(0.02
)
 
(0.08
)
 
(0.05
)
Consolidated
 
$
(0.62
)
 
$
(1.18
)
 
$
(2.21
)
 
$
(2.54
)
 
 
 
 
 
 
 
 
 
Weighted average basic and diluted shares
 
205,532

 
209,080

 
206,242

 
208,693

 
 
 
 
 
 
 
 
 
EBITDA from continuing operations (2)
 
$
(91,743
)
 
$
(47,757
)
 
$
(398,192
)
 
$
(358,309
)
 
 
 
 
 
 
 
 
 
(1) We reclassified $10.2 million and $28.6 million of software and information technology (IT) maintenance expense from occupancy to other expenses for the three and nine months ended January 31, 2018, respectively, to conform to the current period presentation.
(2)  
See "Non-GAAP Financial Information" for a reconciliation of non-GAAP measures.





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U.S. TAX OPERATING DATA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fiscal Year-to-Date
 
 
 
Fiscal Year-to-Date
 
 
 
 
January 31,
 
 
 
February 28,
 
 
 
 
2019
 
2018
 
% Change
 
2019
 
2018
 
% Change
 
 
 
 
 
 
 
 
 
 
 
 
 
Tax Returns Prepared: (in 000s) (1) (2)
 
 
 
 
 
 
 
 
 
 
 
 
Company-Owned Operations
 
1,310

 
1,453

 
(9.8
)%
 
4,101

 
4,429

 
(7.4
)%
Franchise Operations
 
657

 
707

 
(7.1
)%
 
1,938

 
2,028

 
(4.4
)%
   Total H&R Block Assisted
 
1,967

 
2,160

 
(8.9
)%
 
6,039

 
6,457

 
(6.5
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Desktop
 
128

 
151

 
(15.2
)%
 
706

 
764

 
(7.6
)%
Online
 
1,164

 
1,126

 
3.4
 %
 
3,480

 
3,170

 
9.8
 %
Total H&R Block DIY
 
1,292

 
1,277

 
1.2
 %
 
4,186

 
3,934

 
6.4
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
IRS Free File
 
101

 
94

 
7.4
 %
 
340

 
306

 
11.1
 %
Total H&R Block Returns
 
3,360

 
3,531

 
(4.8
)%
 
10,565

 
10,697

 
(1.2
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Average Charge: (3)
 
 
 
 
 
 
 
 
 
 
 
 
Company-Owned Operations
 
$
252.60

 
$
236.38

 
6.9
 %
 
$
231.64

 
$
223.03

 
3.9
 %
Franchise Operations (4)
 
244.08

 
224.00

 
9.0
 %
 
218.78

 
205.21

 
6.6
 %
DIY
 
29.15

 
30.39

 
(4.1
)%
 
27.29

 
27.71

 
(1.5
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)  
An assisted tax return is defined as a current or prior year individual tax return that has been accepted and paid for by the client.  Also included are business returns, which account for less than 1% of assisted tax returns. A DIY return is defined as a return that has been electronically filed and accepted by the IRS.  Also included are online returns paid and printed.
(2)  
Amounts have been reclassified between company-owned and franchise for offices which were refranchised or repurchased by the company during the year.
(3)  
Net average charge is calculated as tax preparation fees divided by tax returns prepared. For DIY, net average charge excludes IRS Free File.
(4) 
Net average charge related to H&R Block Franchise Operations represents tax preparation fees collected by H&R Block franchisees divided by returns prepared in franchise offices. H&R Block will recognize a portion of franchise revenues as franchise royalties based on the terms of franchise agreements.




https://cdn.kscope.io/ece6fbd221b192c788a039fa17affae6-hrbnewlogoa05.jpg
 
 
Three months ended January 31,
 
Nine months ended January 31,
NON-GAAP FINANCIAL MEASURE - EBITDA
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
Net loss - as reported
 
$
(126,454
)
 
$
(245,645
)
 
$
(455,400
)
 
$
(529,778
)
Discontinued operations, net
 
6,675

 
2,720

 
15,887

 
10,723

Net loss from continuing operations - as reported
 
(119,779
)
 
(242,925
)
 
(439,513
)
 
(519,055
)
Add back:
 
 
 
 
 
 
 
 
Income taxes of continuing operations
 
(38,885
)
 
122,120

 
(149,906
)
 
(43,234
)
Interest expense of continuing operations
 
22,833

 
24,560

 
65,214

 
67,102

Depreciation and amortization of continuing operations
 
44,088

 
48,488

 
126,013

 
136,878

 
 
28,036

 
195,168

 
41,321

 
160,746

 
 
 
 
 
 
 
 
 
EBITDA from continuing operations
 
$
(91,743
)
 
$
(47,757
)
 
$
(398,192
)
 
$
(358,309
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended January 31,
 
Nine months ended January 31,
Supplemental Information
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
Stock-based compensation expense:
 
 
 
 
 
 
 
 
Pretax
 
$
6,170

 
$
5,438

 
$
18,009

 
$
17,065

After-tax
 
4,440

 
8,228

 
13,429

 
15,753

Amortization of intangible assets:
 
 
 
 
 
 
 
 
Pretax
 
$
18,737

 
$
20,792

 
$
54,461

 
$
59,465

After-tax
 
13,487

 
29,863

 
40,612

 
54,892

 
 
 
 
 
 
 
 
 
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.