hrb-20210809
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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): August 9, 2021
H&R BLOCK, INC.
(Exact name of registrant as specified in charter)
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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))
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, without par value | HRB | New York Stock Exchange |
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.
As previously disclosed on the Form 8-K and Form 10-K each dated June 15, 2021, H&R Block, Inc. (the “Company”) changed its fiscal year end from April 30 to June 30. As a result, the Company's 2022 fiscal year began on July 1, 2021 and will end on June 30, 2022. The change to the fiscal year end had no impact on the Company’s historical consolidated financial position, results of operations, or cash flows.
In order to aid in the comparability to historical financial data, the Company has recast select historical financial information and metrics on the basis of a June 30 fiscal year end. Exhibit 99.1 contains recast select unaudited financial information and metrics for the three months ended September 30, 2020, the three months ended December 31, 2020, the three months ended March 31, 2021 and the three and twelve months ended June 30, 2021.
The recast select unaudited financial information and metrics contained in Exhibit 99.1 does not represent a restatement of previously issued financial statements. The information in this Item 2.02, including Exhibit 99.1, should be read in conjunction with the Company’s Transition Report on Form 10-Q for the two months ended June 30, 2021 and the Company's Annual Report on 10-K for the twelve months ended April 30, 2021.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that Section, and shall not be deemed incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number Description
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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.
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| | | H&R BLOCK, INC. |
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Date: | August 9, 2021 | By: | /s/ Scott W. Andreasen |
| | | Scott W. Andreasen |
| | | Vice President and Secretary |
Document
Introductory Note
On June 9, 2021, the Board of Directors approved a change of the Company's fiscal year end from April 30 to June 30. As a result, the Company's 2022 fiscal year began on July 1, 2021 and will end on June 30, 2022. The change to the fiscal year end had no impact on the Company’s historical consolidated financial position, results of operations, or cash flows. In order to aid in comparability to historical financial data, the Company has recast select unaudited historical financial information and metrics on the basis of a June 30 fiscal year end in the following table. Actual results for the comparable periods in the Company's 2022 fiscal year could differ materially from those experienced in the prior year periods reflected below.
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SELECT RECAST FINANCIAL RESULTS | | | (Unaudited) (in 000's except per share amounts) |
| September 30, 2020 | | December 31, 2020 | | March 31, 2021 | | June 30, 2021 |
| Three Months Ended | | Three Months Ended | | Three Months Ended | | Three Months Ended | | Twelve Months Ended |
| | | | | | | | | | | |
REVENUES: | | | | | | | | | | | |
U.S. assisted tax preparation | $ | 207,167 | | | $ | 34,020 | | | | $ | 1,290,892 | | | | $ | 608,331 | | | $ | 2,140,410 | |
U.S. royalties | 22,652 | | | 5,357 | | | | 150,117 | | | | 60,503 | | | 238,629 | |
U.S. DIY tax preparation | 47,463 | | | 6,114 | | | | 181,294 | | | | 132,418 | | | 367,289 | |
International | 58,776 | | | 26,637 | | | | 62,869 | | | | 81,125 | | | 229,407 | |
Refund Transfers | 6,113 | | | 397 | | | | 134,799 | | | | 31,047 | | | 172,356 | |
Emerald Card® | 12,436 | | | 9,962 | | | | 73,647 | | | | 48,050 | | | 144,095 | |
Peace of Mind® Extended Service Plan | 27,192 | | | 18,570 | | | | 17,668 | | | | 34,421 | | | 97,851 | |
Tax Identity Shield® | 8,994 | | | 4,809 | | | | 8,643 | | | | 18,553 | | | 40,999 | |
Interest and fee income on Emerald AdvanceSM | 526 | | | 14,039 | | | | 38,247 | | | | 429 | | | 53,241 | |
Wave | 13,737 | | | 14,837 | | | | 16,082 | | | | 18,478 | | | 63,134 | |
Other | 12,290 | | | 7,223 | | | | 9,306 | | | | 12,415 | | | 41,234 | |
Total revenues | 417,346 | | | 141,965 | | | | 1,983,564 | | | | 1,045,770 | | | 3,588,645 | |
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Compensation and benefits: | | | | | | | | | | | |
Field wages | 92,545 | | | 66,307 | | | | 409,741 | | | | 243,530 | | | 812,123 | |
Other wages | 63,068 | | | 63,568 | | | | 78,181 | | | | 75,487 | | | 280,304 | |
Benefits and other compensation | 33,805 | | | 27,650 | | | | 92,825 | | | | 57,102 | | | 211,382 | |
Total compensation and benefits | 189,418 | | | 157,525 | | | | 580,747 | | | | 376,119 | | | 1,303,809 | |
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Occupancy | 96,850 | | | 99,029 | | | | 113,759 | | | | 103,862 | | | 413,500 | |
Marketing and advertising | 15,492 | | | 15,490 | | | | 183,109 | | | | 50,654 | | | 264,745 | |
Depreciation and amortization | 38,237 | | | 39,699 | | | | 39,100 | | | | 37,782 | | | 154,818 | |
Bad debt | 520 | | | 16,570 | | | | 46,066 | | | | 19,197 | | | 82,353 | |
Other | 77,582 | | | 93,200 | | | | 169,546 | | | | 137,457 | | | 477,785 | |
Total operating expenses | 418,099 | | | 421,513 | | | | 1,132,327 | | | | 725,071 | | | 2,697,010 | |
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Other income (expense), net | 2,504 | | | 538 | | | | 449 | | | | 1,498 | | | 4,989 | |
Interest expense on borrowings | (34,697) | | | (21,489) | | | | (22,471) | | | | (20,834) | | | (99,491) | |
Pretax income (loss) | (32,946) | | | (300,499) | | | | 829,215 | | | | 301,363 | | | 797,133 | |
Income taxes (benefit) | 27,964 | | | (46,510) | | | | 69,543 | | | | 55,678 | | | 106,675 | |
Net income (loss) from continuing operations | (60,910) | | | (253,989) | | | | 759,672 | | | | 245,685 | | | 690,458 | |
Net loss from discontinued operations | (1,346) | | | (1,762) | | | | (1,425) | | | | (1,976) | | | (6,509) | |
Net income (loss) | $ | (62,256) | | | $ | (255,751) | | | | $ | 758,247 | | | | $ | 243,709 | | | $ | 683,949 | |
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DILUTED EARNINGS (LOSS) PER SHARE: | | | | | | | | | | | |
Continuing operations | $ | (0.32) | | | $ | (1.38) | | | | $ | 4.09 | | | | $ | 1.32 | | | $ | 3.67 | |
Discontinued operations | — | | | (0.01) | | | | (0.01) | | | | (0.01) | | | (0.03) | |
Consolidated | $ | (0.32) | | | $ | (1.39) | | | | $ | 4.08 | | | | $ | 1.31 | | | $ | 3.64 | |
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WEIGHTED AVERAGE DILUTED SHARES | 192,314 | | | 183,883 | | | | 184,905 | | | | 184,849 | | | 187,316 | |
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Adjusted Diluted EPS(1) | $ | (0.24) | | | $ | (1.28) | | | | $ | 4.11 | | | | $ | 1.39 | | | $ | 3.94 | |
EBITDA from continuing operations (1) | 39,988 | | | (239,311) | | | | 890,786 | | | | 359,979 | | | 1,051,442 | |
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(1) All non-GAAP measures are results from continuing operations. See "Non-GAAP Financial Measures" for a reconciliation of non-GAAP measures.
Select Recast Non-GAAP Financial Measures
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| | | | | | | | (Unaudited) (in 000's) |
NON-GAAP FINANCIAL MEASURE - EBITDA |
| September 30, 2020 | | December 31, 2020 | | March 31, 2021 | | June 30, 2021 |
| Three Months Ended | | Three Months Ended | | Three Months Ended | | Three Months Ended | | Twelve Months Ended |
| | | | | | | | | | | |
Net income (loss) - as reported | $ | (62,256) | | | $ | (255,751) | | | | $ | 758,247 | | | | $ | 243,709 | | | $ | 683,949 | |
Discontinued operations, net | (1,346) | | | (1,762) | | | | (1,425) | | | | (1,976) | | | (6,509) | |
Net income (loss) from continuing operations - as reported | (60,910) | | | (253,989) | | | | 759,672 | | | | 245,685 | | | 690,458 | |
Add back: | | | | | | | | | | | |
Income taxes (benefit) | 27,964 | | | (46,510) | | | | 69,543 | | | | 55,678 | | | 106,675 | |
Interest expense | 34,697 | | | 21,489 | | | | 22,471 | | | | 20,834 | | | 99,491 | |
Depreciation and amortization | 38,237 | | | 39,699 | | | | 39,100 | | | | 37,782 | | | 154,818 | |
| 100,898 | | | 14,678 | | | | 131,114 | | | | 114,294 | | | 360,984 | |
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EBITDA from continuing operations | $ | 39,988 | | | $ | (239,311) | | | | $ | 890,786 | | | | $ | 359,979 | | | $ | 1,051,442 | |
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| | | (Unaudited) (in 000s, except per share amounts) |
NON-GAAP FINANCIAL MEASURE - ADJUSTED EPS |
| September 30, 2020 | | December 31, 2020 | | March 31, 2021 | | June 30, 2021 |
| Three Months Ended | | Three Months Ended | | Three Months Ended | | Three Months Ended | | Twelve Months Ended |
| | | | | | | | | | | |
Net income (loss) from continuing operations - as reported | $ | (60,910) | | | $ | (253,989) | | | | $ | 759,672 | | | | $ | 245,685 | | | $ | 690,458 | |
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Adjustments: | | | | | | | | | | | |
Amortization of intangibles related to acquisitions (pretax) | 17,638 | | | 16,531 | | | | 16,229 | | | | 15,848 | | | 66,246 | |
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Tax effect of adjustments(1) | (1,854) | | | 2,086 | | | | (11,699) | | | | (3,648) | | | (15,115) | |
Adjusted net income (loss) from continuing operations | $ | (45,126) | | | $ | (235,372) | | | | $ | 764,202 | | | | $ | 257,885 | | | $ | 741,589 | |
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Diluted earnings (loss) per share from continuing operations - as reported | $ | (0.32) | | | $ | (1.38) | | | | $ | 4.09 | | | | $ | 1.32 | | | $ | 3.67 | |
Adjustments, net of tax | 0.08 | | | 0.10 | | | | 0.02 | | | | 0.07 | | | 0.27 | |
Adjusted diluted earnings (loss) per share from continuing operations | $ | (0.24) | | | $ | (1.28) | | | | $ | 4.11 | | | | $ | 1.39 | | | $ | 3.94 | |
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(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.