• H&R Block Reports Fiscal 2025 First Quarter Results

    Источник: Nasdaq GlobeNewswire / 07 ноя 2024 16:05:02   America/New_York

    — Revenue Increased 5% —

    — Repurchased $210 Million of Shares —

    — Reaffirms Full Year Outlook —

    KANSAS CITY, Mo., Nov. 07, 2024 (GLOBE NEWSWIRE) -- H&R Block, Inc. (NYSE: HRB) (the "Company") today released financial results1 for its fiscal 2025 first quarter ended September 30, 2024.

    "We had a good start to the year and I am pleased with our performance in the quarter," said Jeff Jones, president and chief executive officer. "We are reaffirming our fiscal 2025 outlook and our team is focused on operational and technical enhancements to improve the client experience in office and online."

    Fiscal 2025 First Quarter Results and Key Financial Metrics

    "We delivered revenue growth of 5% and continued our share repurchase program, buying approximately $210 million in the quarter," said Tiffany Mason, chief financial officer. "We are on track for the year and believe we are well positioned to deliver results."

    For the first quarter, the Company delivered total revenue of $193.8 million, an increase of $10.0 million, or 5%, versus the prior year. The increase was primarily due to higher company office volumes and a higher net average charge in the Assisted category combined with higher international tax preparation revenues.

    Total operating expenses of $422.1 million increased by $32.0 million, primarily due to higher tax professional wages in the U.S. and international as a result of higher tax return volume, higher corporate wages, and an increase in legal expenses in the current year.

    Pretax loss increased by $19.9 million to $232.3 million.

    Loss per share from continuing operations2 increased to $(1.23) from $(1.11) and adjusted loss per share from continuing operations2 increased to $(1.17) from $(1.05), due to a higher pretax loss and fewer shares outstanding as a result of share repurchases.

    Capital Allocation

    The Company reported the following related to its capital structure:

    • As previously announced, a quarterly cash dividend of $0.375 per share is payable on January 6, 2025 to shareholders of record as of December 5, 2024. H&R Block has paid quarterly dividends consecutively since the Company became public in 1962.
    • Repurchased and retired 3.3 million shares at an aggregate price of $209.6 million, or $63.51 per share in the first quarter.
    • The Company has approximately $1.3 billion remaining on its $1.5 billion share repurchase program. The repurchase program does not have an expiration date.

    Since 2016, the Company has returned more than $4.1 billion to shareholders in the form of dividends and share repurchases, buying back over 41% of its shares outstanding3.

    Fiscal Year 2025 Outlook Reaffirmed

    The Company continues to expect:

    • Revenue to be in the range of $3.69 to $3.75 billion.
    • EBITDA4 to be in the range of $975 million to $1.02 billion.
    • Effective tax rate to be approximately 13%, resulting in a one-time benefit to EPS of approximately 50 cents.
    • Adjusted Diluted Earnings Per Share4 to be in the range of $5.15 to $5.35.

    Conference Call

    The Company will host a conference call for analysts and investors to discuss first quarter 2025 results at 4:30 p.m. ET on Thursday, November 7, 2024. To join live, participants must register at https://register.vevent.com/register/BI46d8067507a543a1803367b08bae03f8. Once registered, the participant will receive a dial-in number and unique PIN to access the call. Please join approximately 5 minutes prior to the scheduled start time.

    The call, along with a presentation for viewing, will also be webcast in a listen-only format for the media and general public. The webcast can be accessed directly at https://edge.media-server.com/mmc/p/qdeqpgfd and will be available for replay 2 hours after the call is concluded and continuing for 90 days.

    About H&R Block

    H&R Block, Inc. (NYSE: HRB) provides help and inspires confidence in its clients and communities everywhere through global tax preparation services, financial products, and small-business solutions. The company blends digital innovation with human expertise and care as it helps people get the best outcome at tax time, and be better with money using its mobile banking app, Spruce. Through Block Advisors and Wave, the company helps small-business owners thrive with year-round bookkeeping, payroll, advisory, and payment processing solutions. For more information, visit H&R Block News.

    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. They may also include the expected impact of external events beyond the Company’s control, such as outbreaks of infectious disease, severe weather events, natural or manmade disasters, or changes in the regulatory environment in which we operate. 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 most recently completed fiscal year 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 https://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, future actions of the Company, or increases in applicable tax rates in jurisdictions where the Company operates. 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.

    1All amounts in this release are unaudited. Unless otherwise noted, all comparisons refer to the current period compared to the corresponding prior year period.
    2All per share amounts are based on fully diluted shares at the end of the corresponding period. The Company reports non-GAAP financial measures of performance, including adjusted earnings per share (EPS), earnings before interest, tax, depreciation, and amortization (EBITDA) from continuing operations, free cash flow, and free cash flow yield, 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).
    3Shares outstanding calculated as of April 30, 2016.
    4Adjusted Diluted EPS and EBITDA from continuing operations are non-GAAP financial measures. Future period non-GAAP outlook includes adjustments for items not indicative of our core operations, which may include, without limitation, items described in the below section titled “Non-GAAP Financial Information” and in the accompanying tables. Such adjustments may be affected by changes in ongoing assumptions and judgments, as well as nonrecurring, unusual, or unanticipated charges, expenses or gains, or other items that may not directly correlate to the underlying performance of our business operations. The exact amounts of these adjustments are not currently determinable but may be significant. It is therefore not practicable to provide the comparable GAAP measures or reconcile this non-GAAP outlook to the most comparable GAAP measures.

    For Further Information
      
    Investor Relations:Michaella Gallina, (816) 854-3022, michaella.gallina@hrblock.com 
     Jordyn Eskijian, (816) 854-5674, jordyn.eskijian@hrblock.com 
    Media Relations:Teri Daley, (816) 854-3787, teri.daley@hrblock.com 
     Media Desk, mediadesk@hrblock.com 


    FINANCIAL RESULTS(unaudited, in 000s - except per share amounts)
      Three months ended September 30,
       2024   2023 
    REVENUES:    
    U.S. tax preparation and related services:    
    Assisted tax preparation $                    42,963   $                    39,263 
    Royalties                          5,852                            5,701 
    DIY tax preparation                          3,236                            3,848 
    Refund Transfers                             860                            1,142 
    Peace of Mind® Extended Service Plan                        23,097                          24,847 
    Tax Identity Shield®                          3,909                            4,580 
    Other                        13,809                          10,980 
    Total U.S. tax preparation and related services                        93,726                          90,361 
    Financial services:    
    Emerald Card® and SpruceSM                          8,826                            8,633 
    Interest and fee income on Emerald Advance®                               —                               298 
    Total financial services                          8,826                            8,931 
    International                        64,855                          60,565 
    Wave                        26,403                          23,943 
    Total revenues $                  193,810   $                  183,800 
    Compensation and benefits:    
    Field wages                        68,094                          62,435 
    Other wages                        77,335                          72,098 
    Benefits and other compensation                        38,754                          35,248 
                           184,183                        169,781 
    Occupancy                      101,318                          99,285 
    Marketing and advertising                          9,972                            5,481 
    Depreciation and amortization                        28,831                          30,225 
    Bad debt                          2,730                            4,798 
    Other                        95,107                          80,556 
    Total operating expenses                      422,141                        390,126 
    Other income (expense), net                        11,917                            9,836 
    Interest expense on borrowings                      (15,847)                      (15,870)
    Pretax loss                    (232,261)                    (212,360)
    Income tax benefit                      (60,840)                      (49,487)
    Net loss from continuing operations                    (171,421)                    (162,873)
    Net loss from discontinued operations                        (1,155)                           (609)
    Net loss $                (172,576) $                (163,482)
    BASIC AND DILUTED LOSS PER SHARE:    
    Continuing operations $                      (1.23) $                      (1.11)
    Discontinued operations                          (0.01)                          (0.01)
    Consolidated $                      (1.24) $                      (1.12)
    WEIGHTED AVERAGE DILUTED SHARES                      139,154                        146,273 
    Adjusted diluted EPS (1) $                      (1.17) $                      (1.05)
    EBITDA (1) $                (187,583) $                (166,265)
         

    (1) All non-GAAP measures are results from continuing operations. See "Non-GAAP Financial Information" for a reconciliation of non-GAAP measures.

    CONSOLIDATED BALANCE SHEETS (unaudited, in 000s - except per share data)
    As of September 30, 2024 June 30, 2024
         
    ASSETS    
    Cash and cash equivalents $                  415,860   $               1,053,326 
    Cash and cash equivalents - restricted                        23,157                          21,867 
    Receivables, net                        69,929                          69,075 
    Prepaid expenses and other current assets                      102,657                          95,208 
    Total current assets                      611,603                     1,239,476 
    Property and equipment, net                      135,533                        131,319 
    Operating lease right of use assets                      426,990                        461,986 
    Intangible assets, net                      256,053                        264,102 
    Goodwill                      792,195                        785,226 
    Deferred tax assets and income taxes receivable                      261,384                        271,658 
    Other noncurrent assets                        66,209                          65,043 
    Total assets $               2,549,967   $               3,218,810 
    LIABILITIES AND STOCKHOLDERS’ EQUITY    
    LIABILITIES:    
    Accounts payable and accrued expenses $                  161,620   $                  155,830 
    Accrued salaries, wages and payroll taxes                        58,294                        105,548 
    Accrued income taxes and reserves for uncertain tax positions                      205,470                        318,830 
    Operating lease liabilities                      189,432                        206,070 
    Deferred revenue and other current liabilities                      181,069                        191,050 
    Total current liabilities                      795,885                        977,328 
    Long-term debt                   1,491,621                     1,491,095 
    Deferred tax liabilities and reserves for uncertain tax positions                      296,370                        291,063 
    Operating lease liabilities                      247,062                        265,373 
    Deferred revenue and other noncurrent liabilities                        87,094                        103,357 
    Total liabilities                   2,918,032                     3,128,216 
    COMMITMENTS AND CONTINGENCIES    
    STOCKHOLDERS’ EQUITY:    
    Common stock, no par, stated value $.01 per share                          1,676                            1,709 
    Additional paid-in capital                      744,076                        762,583 
    Accumulated other comprehensive loss                      (42,728)                      (48,845)
    Retained earnings (deficit)                    (424,548)                        12,654 
    Less treasury shares, at cost                    (646,541)                    (637,507)
    Total stockholders' equity (deficiency)                    (368,065)                        90,594 
    Total liabilities and stockholders' equity $               2,549,967   $               3,218,810 
         


    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in 000s)
    Three months ended September 30,  2024   2023 
         
    CASH FLOWS FROM OPERATING ACTIVITIES:    
    Net loss $                (172,576) $                (163,482)
    Adjustments to reconcile net loss to net cash used in operating activities:    
    Depreciation and amortization                        28,831                          30,225 
    Provision for credit losses                          1,024                            1,098 
    Deferred taxes                        19,006                        (37,757)
    Stock-based compensation                          8,727                            7,550 
    Changes in assets and liabilities, net of acquisitions:    
    Receivables                          1,029                            4,981 
    Prepaid expenses, other current and noncurrent assets                          8,836                            6,396 
    Accounts payable, accrued expenses, salaries, wages and payroll taxes                      (66,017)                      (71,202)
    Deferred revenue, other current and noncurrent liabilities                      (27,025)                      (42,657)
    Income tax receivables, accrued income taxes and income tax reserves                    (129,397)                      (70,301)
    Other, net                        (1,019)                             160 
    Net cash used in operating activities                    (328,581)                    (334,989)
    CASH FLOWS FROM INVESTING ACTIVITIES:    
    Capital expenditures                      (18,735)                      (12,916)
    Payments made for business acquisitions, net of cash acquired                        (5,901)                        (6,919)
    Franchise loans funded                        (7,109)                        (5,380)
    Payments from franchisees                             211                               937 
    Other, net                          5,140                               388 
    Net cash used in investing activities                      (26,394)                      (23,890)
    CASH FLOWS FROM FINANCING ACTIVITIES:    
    Dividends paid                      (44,653)                      (42,953)
    Repurchase of common stock, including shares surrendered                    (238,376)                    (150,442)
    Other, net                        (1,421)                        (1,803)
    Net cash used in financing activities                    (284,450)                    (195,198)
    Effects of exchange rate changes on cash                          3,249                          (3,679)
    Net decrease in cash and cash equivalents, including restricted balances                    (636,176)                    (557,756)
    Cash, cash equivalents and restricted cash, beginning of period                   1,075,193                     1,015,316 
    Cash, cash equivalents and restricted cash, end of period $                  439,017   $                  457,560 
    SUPPLEMENTARY CASH FLOW DATA:    
    Income taxes paid, net (includes payments for purchased investment tax credits) $                    48,343   $                    58,337 
    Interest paid on borrowings                        19,792                          19,792 
    Accrued additions to property and equipment                          6,341                            3,316 
    New operating right of use assets and related lease liabilities                        21,861                          38,468 
    Accrued dividends payable to common shareholders                        52,307                          46,901 
    Accrued purchase of common stock                          7,131                          10,003 
         


    (in 000s)
      Three months ended September 30,
    NON-GAAP FINANCIAL MEASURE - EBITDA  2024   2023 
         
    Net loss - as reported $                (172,576) $                (163,482)
    Discontinued operations, net                          1,155                               609 
    Net loss from continuing operations - as reported                    (171,421)                    (162,873)
    Add back:    
    Income tax benefit                      (60,840)                      (49,487)
    Interest expense                        15,847                          15,870 
    Depreciation and amortization                        28,831                          30,225 
                           (16,162)                        (3,392)
    EBITDA from continuing operations $                (187,583) $                (166,265)
         


    (in 000s, except per share amounts)
      Three months ended September 30,
    NON-GAAP FINANCIAL MEASURE - ADJUSTED EPS  2024   2023 
         
    Net loss from continuing operations - as reported $                (171,421) $                (162,873)
    Adjustments:    
    Amortization of intangibles related to acquisitions (pretax)                        11,128                          12,555 
    Tax effect of adjustments (1)                        (2,645)                        (2,936)
    Adjusted net loss from continuing operations $                (162,938) $                (153,254)
    Diluted loss per share from continuing operations - as reported $                      (1.23) $                      (1.11)
    Adjustments, net of tax                            0.06                              0.06 
    Adjusted diluted loss per share from continuing operations $                      (1.17) $                      (1.05)
         

    (1)Tax effect of adjustments is the difference between the tax provision calculated 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, adjusted diluted earnings per share from continuing operations, free cash flow, and free cash flow yield. 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.


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