H&R Block, Inc. (NYSE: HRB) (the "Company") today released its
financial results1 for the fiscal year ended June 30, 2022.
- H&R Block reports
fiscal year results exceeding its revenue and earnings outlook
- In fiscal year 2022,
the Company completed share repurchases of $550 million at an
average price of $23.84, retiring 13% of its total shares
outstanding
- The Company announced
a 7% increase in its quarterly dividend to $0.29 per share
- The Company announced
a new share repurchase authorization of $1.25 billion available
through fiscal year 2025
- The Company provided
its FY23 outlook, guiding to growth in revenue, EBITDA, and
adjusted earnings per share
"Fiscal year 2022 marked another year of strong
performance, continuing a multi-year trend of driving shareholder
value," said Jeff Jones, H&R Block's president and chief
executive officer. "We produced another strong tax season and
achieved meaningful milestones in our Block Horizons journey,
including a record year in Small Business, launching our new mobile
banking platform, Spruce, and more than tripling the use of virtual
tools among tax clients. I am also pleased to announce that the
Board of Directors has approved an increase to our dividend and a
new share repurchase authorization as a result of the strength in
our business and their confidence in our future."
Fiscal 2022 Results and Key Financial
Metrics
“Our strong finish resulted in beating our revenue
and earnings outlook," said Tony Bowen, H&R Block's chief
financial officer. "Because of our robust free cash flow
generation, we are able to return significant value to
shareholders. This year we repurchased 13% of shares outstanding
and are increasing the dividend by 7%. We continue to create value
and are excited for the years ahead."
Fiscal year 2022 results are not comparable to the
prior year period, as the 2020 tax deadline was extended to July 15
of that year due to the pandemic. As a result, 15 days of tax
season 2020 were included in reported results for the year ended
June 30, 2021. Therefore, to provide a more useful comparison, in
the “Normalized Results” section below the Company has provided
comparisons adjusted for the impacts of the extended 2020 tax
season.
|
|
Year Ended June 30, |
(in millions, except EPS) |
|
2022 |
|
2021 |
Revenue |
|
$ |
3,463 |
|
|
$ |
3,589 |
|
Pretax Income |
|
$ |
659 |
|
|
$ |
797 |
|
Net Income |
|
$ |
554 |
|
|
$ |
684 |
|
Weighted-Avg. Shares - Diluted |
|
|
171.4 |
|
|
|
187.3 |
|
EPS2 |
|
$ |
3.26 |
|
|
$ |
3.67 |
|
Adjusted EPS2 |
|
$ |
3.51 |
|
|
$ |
3.94 |
|
EBITDA2 |
|
$ |
890 |
|
|
$ |
1,051 |
|
- Total revenue of
$3.46 billion decreased by $125 million, or 3.5%.
- Total operating
expenses of $2.7 billion increased by $21 million, or
0.8%, primarily due to higher marketing and technology costs,
partially offset by lower depreciation and amortization and bad
debt.
- Pretax income of
$659 million decreased by $138 million, or 17.3%, due to
the decrease in revenue because of the 2020 tax season
extension.
- Earnings per share
from continuing operations of $3.26 decreased by $0.41, or 11.2%;
adjusted earnings per share from continuing operations of $3.51
decreased by $0.43, or 10.9%.
Normalized2
Results
When comparing fiscal year 2022 to the prior year
results normalized2 to remove the impacts of the tax season
extension into July of 2020 and non-recurring Emerald Card stimulus
activity:
(in millions, except EPS) |
|
Year Ended June 30, |
|
|
|
|
Normalized2Year EndedJune
30, 2021 |
|
|
|
2022 |
|
2021 |
|
% Change |
|
|
% Change |
Total Revenue |
|
$ |
3,463 |
|
|
$ |
3,589 |
|
|
(3.5 |
)% |
|
$ |
3,298 |
|
|
5.0 |
% |
Pretax Income |
|
$ |
659 |
|
|
$ |
797 |
|
|
(17.3 |
)% |
|
$ |
561 |
|
|
17.6 |
% |
Adjusted EPS2 |
|
$ |
3.51 |
|
|
$ |
3.94 |
|
|
(10.9 |
)% |
|
$ |
2.97 |
|
|
18.2 |
% |
EBITDA2 |
|
$ |
890 |
|
|
$ |
1,051 |
|
|
(15.3 |
)% |
|
$ |
815 |
|
|
9.2 |
% |
- Total revenue of
$3.46 billion increased by $165 million, or 5.0%.
- Pretax income of
$659 million increased by $99 million, or 17.6%.
- Adjusted earnings per
share from continuing operations2 of $3.51 increased by $0.54, or
18.2%.
- EBITDA2 of
$890 million increased by $75 million, or 9.2%.
Capital Structure
The Company reported the following related to its
capital structure:
- In fiscal year 2022,
the Company repurchased and retired approximately 23 million
shares, or 13% of shares outstanding, at an aggregate price of $550
million, or $23.84 per share.
- The Company announced
today that the Board of Directors approved a new share repurchase
authorization of $1.25 billion, effective through fiscal year
2025.
- The Company announced
today that the Board of Directors increased the quarterly dividend
by 7%, representing the sixth increase in seven years. The
quarterly cash dividend is now $0.29 per share, payable on October
3, 2022, to shareholders of record as of September 8, 2022.
H&R Block has paid quarterly dividends
consecutively since the Company became public in 1962. Since 2016,
the Company has returned over $2.7 billion to shareholders in the
form of share repurchases and dividends.
Outlook
For fiscal year 2023 the Company expects:
- Revenue to be in the
range of $3.535 to $3.585 billion.
- EBITDA3 to be in the
range of $915 to $950 million.
- Effective tax rate to
be approximately 22%.
- Adjusted Diluted
Earnings Per Share3 to be in the range of $3.70 to $3.95.
The Company expects double digit Adjusted Diluted
Earnings Per Share3 growth annually through 2025.
Conference Call & Webcast
A conference call for analysts, institutional
investors, and shareholders will be held at 4:30 p.m. Eastern time
on Tuesday, August 9, 2022. During the conference call the company
will discuss fiscal 2022 results, outlook, and a general business
update. To join live, participants must register at
https://register.vevent.com/register/BI1e6bb1dd7d67421f8c5a52396a15e904.
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
public. The webcast can be accessed directly at
https://edge.media-server.com/mmc/p/bh45bypx 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 also be better with money using its mobile
banking app, Spruce. Through Block Advisors and Wave, the company
helps small-business owners thrive with innovative products like
Wave Money, a mobile-first, small-business bank account and
bookkeeping solution that manages bookkeeping automatically. For
more information, visit H&R Block News or follow @HRBlockNews
on Twitter.
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 also include the expected impact of the coronavirus
(COVID-19) pandemic, including, without limitation, the impact on
economic and financial markets, the Company’s capital resources and
financial condition, the expected use of proceeds under the
Company’s revolving credit facility, future expenditures, potential
regulatory actions, such as extensions of tax filing deadlines or
other related relief, changes in consumer behaviors and
modifications to the Company’s operations related thereto. 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, 2021 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.
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. 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, normalized revenues, normalized pretax
income, normalized EBITDA, and normalized adjusted earnings per
share, 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).3 Adjusted Diluted Earnings Per Share
(EPS) and earnings before interest, tax, depreciation, and
amortization (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: |
|
Angela Davied, (816) 854-5798,
angela.davied@hrblock.com |
|
|
|
FINANCIAL RESULTS |
|
(unaudited, in 000s - except per share amounts) |
|
|
Three months ended June 30, |
|
Year ended June 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
REVENUES: |
|
|
|
|
|
|
|
|
U.S. assisted tax preparation |
|
$ |
638,018 |
|
|
$ |
608,331 |
|
|
$ |
2,094,612 |
|
|
$ |
2,140,410 |
|
U.S. royalties |
|
|
55,694 |
|
|
|
60,503 |
|
|
|
225,242 |
|
|
|
238,629 |
|
U.S. DIY tax preparation |
|
|
130,631 |
|
|
|
132,418 |
|
|
|
319,086 |
|
|
|
367,289 |
|
International |
|
|
79,871 |
|
|
|
81,125 |
|
|
|
231,335 |
|
|
|
229,407 |
|
Refund Transfers |
|
|
28,228 |
|
|
|
31,047 |
|
|
|
162,893 |
|
|
|
172,356 |
|
Emerald Card® |
|
|
21,696 |
|
|
|
48,050 |
|
|
|
125,444 |
|
|
|
144,095 |
|
Peace of Mind® Extended Service Plan |
|
|
35,264 |
|
|
|
34,421 |
|
|
|
94,637 |
|
|
|
97,851 |
|
Tax Identity Shield® |
|
|
19,683 |
|
|
|
18,553 |
|
|
|
39,114 |
|
|
|
40,999 |
|
Interest and fee income on Emerald AdvanceSM |
|
|
543 |
|
|
|
429 |
|
|
|
43,981 |
|
|
|
53,241 |
|
Wave |
|
|
22,220 |
|
|
|
18,478 |
|
|
|
80,965 |
|
|
|
63,134 |
|
Other |
|
|
18,225 |
|
|
|
12,415 |
|
|
|
45,961 |
|
|
|
41,234 |
|
Total revenues |
|
|
1,050,073 |
|
|
|
1,045,770 |
|
|
|
3,463,270 |
|
|
|
3,588,645 |
|
|
|
|
|
|
|
|
|
|
Compensation and benefits: |
|
|
|
|
|
|
|
|
Field wages |
|
|
247,421 |
|
|
|
243,530 |
|
|
|
808,903 |
|
|
|
812,123 |
|
Other wages |
|
|
83,974 |
|
|
|
75,487 |
|
|
|
284,689 |
|
|
|
280,304 |
|
Benefits and other compensation |
|
|
60,194 |
|
|
|
57,102 |
|
|
|
206,902 |
|
|
|
211,382 |
|
|
|
|
391,589 |
|
|
|
376,119 |
|
|
|
1,300,494 |
|
|
|
1,303,809 |
|
|
|
|
|
|
|
|
|
|
Occupancy |
|
|
106,639 |
|
|
|
103,862 |
|
|
|
413,162 |
|
|
|
413,500 |
|
Marketing and advertising |
|
|
60,448 |
|
|
|
50,654 |
|
|
|
284,244 |
|
|
|
264,745 |
|
Depreciation and amortization |
|
|
34,716 |
|
|
|
37,782 |
|
|
|
142,178 |
|
|
|
154,818 |
|
Bad debt |
|
|
12,018 |
|
|
|
19,197 |
|
|
|
71,778 |
|
|
|
82,353 |
|
Other |
|
|
133,059 |
|
|
|
137,457 |
|
|
|
506,517 |
|
|
|
477,785 |
|
Total operating expenses |
|
|
738,469 |
|
|
|
725,071 |
|
|
|
2,718,373 |
|
|
|
2,697,010 |
|
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
|
465 |
|
|
|
1,498 |
|
|
|
2,454 |
|
|
|
4,989 |
|
Interest expense on borrowings |
|
|
(18,621 |
) |
|
|
(20,834 |
) |
|
|
(88,282 |
) |
|
|
(99,491 |
) |
Income from continuing
operations before income taxes |
|
|
293,448 |
|
|
|
301,363 |
|
|
|
659,069 |
|
|
|
797,133 |
|
Income taxes |
|
|
68,757 |
|
|
|
55,678 |
|
|
|
98,423 |
|
|
|
106,675 |
|
Net income from continuing operations |
|
|
224,691 |
|
|
|
245,685 |
|
|
|
560,646 |
|
|
|
690,458 |
|
Net loss from discontinued
operations |
|
|
(1,988 |
) |
|
|
(1,976 |
) |
|
|
(6,972 |
) |
|
|
(6,509 |
) |
Net income |
|
$ |
222,703 |
|
|
$ |
243,709 |
|
|
$ |
553,674 |
|
|
$ |
683,949 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS PER SHARE: |
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
1.37 |
|
|
$ |
1.32 |
|
|
$ |
3.26 |
|
|
$ |
3.67 |
|
Discontinued operations |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
(0.04 |
) |
|
|
(0.03 |
) |
Consolidated |
|
$ |
1.36 |
|
|
$ |
1.31 |
|
|
$ |
3.22 |
|
|
$ |
3.64 |
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE DILUTED SHARES |
|
|
163,283 |
|
|
|
184,849 |
|
|
|
171,435 |
|
|
|
187,316 |
|
|
|
|
|
|
|
|
|
|
Adjusted diluted EPS(1) |
|
$ |
1.43 |
|
|
$ |
1.39 |
|
|
$ |
3.51 |
|
|
$ |
3.94 |
|
EBITDA(1) |
|
$ |
346,785 |
|
|
$ |
359,979 |
|
|
$ |
889,529 |
|
|
$ |
1,051,442 |
|
|
|
|
|
|
|
|
|
|
(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 June 30, |
|
2022 |
|
2021 |
|
|
|
|
|
ASSETS |
|
|
|
|
Cash and cash equivalents |
|
$ |
885,015 |
|
|
$ |
1,434,381 |
|
Cash and cash equivalents - restricted |
|
|
165,698 |
|
|
|
149,783 |
|
Receivables, net |
|
|
58,447 |
|
|
|
88,932 |
|
Income taxes receivable |
|
|
202,838 |
|
|
|
330,872 |
|
Prepaid expenses and other current assets |
|
|
72,460 |
|
|
|
76,414 |
|
Total current assets |
|
|
1,384,458 |
|
|
|
2,080,382 |
|
Property and equipment, net |
|
|
123,912 |
|
|
|
139,276 |
|
Operating lease right of use asset |
|
|
427,783 |
|
|
|
445,847 |
|
Intangible assets, net |
|
|
309,644 |
|
|
|
351,093 |
|
Goodwill |
|
|
760,401 |
|
|
|
754,521 |
|
Deferred tax assets and income taxes receivable |
|
|
208,948 |
|
|
|
181,996 |
|
Other noncurrent assets |
|
|
54,012 |
|
|
|
61,273 |
|
Total assets |
|
$ |
3,269,158 |
|
|
$ |
4,014,388 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
LIABILITIES: |
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
160,929 |
|
|
$ |
164,269 |
|
Accrued salaries, wages and payroll taxes |
|
|
154,764 |
|
|
|
168,989 |
|
Accrued income taxes and reserves for uncertain tax positions |
|
|
280,115 |
|
|
|
238,863 |
|
Operating lease liabilities |
|
|
206,898 |
|
|
|
214,190 |
|
Deferred revenue and other current liabilities |
|
|
196,107 |
|
|
|
196,175 |
|
Total current liabilities |
|
|
998,813 |
|
|
|
982,486 |
|
Long-term debt |
|
|
1,486,876 |
|
|
|
1,983,719 |
|
Deferred tax liabilities and reserves for uncertain tax
positions |
|
|
226,362 |
|
|
|
301,658 |
|
Operating lease liabilities |
|
|
228,820 |
|
|
|
244,932 |
|
Deferred revenue and other noncurrent liabilities |
|
|
116,656 |
|
|
|
113,535 |
|
Total liabilities |
|
|
3,057,527 |
|
|
|
3,626,330 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
STOCKHOLDERS’ EQUITY: |
|
|
|
|
Common stock, no par, stated value $.01 per share |
|
|
1,936 |
|
|
|
2,167 |
|
Additional paid-in capital |
|
|
772,182 |
|
|
|
779,465 |
|
Accumulated other comprehensive income (loss) |
|
|
(21,645 |
) |
|
|
88 |
|
Retained earnings |
|
|
120,405 |
|
|
|
286,694 |
|
Less treasury shares, at cost |
|
|
(661,247 |
) |
|
|
(680,356 |
) |
Total stockholders' equity |
|
|
211,631 |
|
|
|
388,058 |
|
Total liabilities and stockholders' equity |
|
$ |
3,269,158 |
|
|
$ |
4,014,388 |
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
(unaudited, in 000s) |
Year ended June 30, |
|
2022 |
|
2021 |
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
Net income |
|
$ |
553,674 |
|
|
$ |
683,949 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
142,178 |
|
|
|
154,818 |
|
Provision for bad debt |
|
|
66,807 |
|
|
|
76,350 |
|
Deferred taxes |
|
|
(53,352 |
) |
|
|
33,775 |
|
Stock-based compensation |
|
|
34,252 |
|
|
|
27,808 |
|
Changes in assets and liabilities, net of acquisitions: |
|
|
|
|
Receivables |
|
|
(37,889 |
) |
|
|
(69,554 |
) |
Prepaid expenses and other current and noncurrent assets |
|
|
(1,944 |
) |
|
|
(10,334 |
) |
Accounts payable, accrued expenses, salaries, wages and payroll
taxes |
|
|
(19,645 |
) |
|
|
85,062 |
|
Deferred revenue, other current and noncurrent liabilities |
|
|
7,342 |
|
|
|
(994 |
) |
Income tax receivables, accrued income taxes and income tax
reserves |
|
|
118,713 |
|
|
|
(214,586 |
) |
Other, net |
|
|
(1,599 |
) |
|
|
(5,058 |
) |
Net cash provided by operating activities |
|
|
808,537 |
|
|
|
761,236 |
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Capital expenditures |
|
|
(61,955 |
) |
|
|
(53,053 |
) |
Payments made for business acquisitions, net of cash acquired |
|
|
(35,920 |
) |
|
|
(17,024 |
) |
Franchise loans funded |
|
|
(18,467 |
) |
|
|
(26,926 |
) |
Payments from franchisees |
|
|
30,899 |
|
|
|
43,643 |
|
Other, net |
|
|
8,902 |
|
|
|
10,713 |
|
Net cash used in investing activities |
|
|
(76,541 |
) |
|
|
(42,647 |
) |
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Repayments of line of credit borrowings |
|
|
(705,000 |
) |
|
|
(3,275,000 |
) |
Proceeds from line of credit borrowings |
|
|
705,000 |
|
|
|
1,275,000 |
|
Repayments of long-term debt |
|
|
(500,000 |
) |
|
|
(650,000 |
) |
Proceeds from issuance of long-term debt |
|
|
— |
|
|
|
1,142,400 |
|
Dividends paid |
|
|
(186,476 |
) |
|
|
(195,068 |
) |
Repurchase of common stock, including shares surrendered |
|
|
(563,174 |
) |
|
|
(193,551 |
) |
Proceeds from exercise of stock options |
|
|
6,334 |
|
|
|
2,537 |
|
Other, net |
|
|
(14,030 |
) |
|
|
(24,147 |
) |
Net cash used in financing activities |
|
|
(1,257,346 |
) |
|
|
(1,917,829 |
) |
|
|
|
|
|
Effects of exchange rate changes on cash |
|
|
(8,101 |
) |
|
|
13,457 |
|
|
|
|
|
|
Net decrease in cash and cash equivalents, including restricted
balances |
|
|
(533,451 |
) |
|
|
(1,185,783 |
) |
Cash, cash equivalents and restricted cash, beginning of the
year |
|
|
1,584,164 |
|
|
|
2,769,947 |
|
Cash, cash equivalents and restricted cash, end of the year |
|
$ |
1,050,713 |
|
|
$ |
1,584,164 |
|
|
|
|
|
|
SUPPLEMENTARY CASH FLOW DATA: |
|
|
|
|
Income taxes paid, net of refunds received |
|
$ |
31,689 |
|
|
$ |
286,040 |
|
Interest paid on borrowings |
|
|
81,960 |
|
|
|
92,756 |
|
Accrued additions to property and equipment |
|
|
4,315 |
|
|
|
2,085 |
|
Accrued dividends payable to common shareholders |
|
|
43,093 |
|
|
|
48,998 |
|
|
|
|
|
|
(in 000s, except per share amounts) |
NON-GAAP FINANCIAL MEASURE - FISCAL YEAR 2022 COMPARED TO
THE NORMALIZED TWELVE MONTHS ENDED JUNE 30, 2021 |
|
Year EndedJune 30, 2022 |
|
Year EndedJune 30, 2021 |
|
NormalizedYear EndedJune 30, 2021 |
|
Variance(1) |
|
|
|
|
$ |
% |
|
|
|
|
|
|
|
|
|
|
|
Revenue - as reported |
|
$ |
3,463,270 |
|
|
$ |
3,588,645 |
|
|
$ |
3,588,645 |
|
|
$ |
(125,375 |
) |
|
(3.5 |
)% |
Adjustments - normalization: |
|
|
|
|
|
|
|
|
|
|
Impacts of Emerald Card Stimulus |
|
|
— |
|
|
|
— |
|
|
|
(44,346 |
) |
|
|
|
|
Tax Season impacts recognized in July 2020 |
|
|
— |
|
|
|
— |
|
|
|
(246,250 |
) |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
(290,596 |
) |
|
|
|
|
Revenues |
|
$ |
3,463,270 |
|
|
$ |
3,588,645 |
|
|
$ |
3,298,049 |
|
|
$ |
165,221 |
|
|
5.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
Pretax income - as reported |
|
$ |
659,069 |
|
|
$ |
797,133 |
|
|
$ |
797,133 |
|
|
$ |
(138,064 |
) |
|
(17.3 |
)% |
Adjustments - normalization: |
|
|
|
|
|
|
|
|
|
|
Impacts of Emerald Card Stimulus and pandemic related sick pay and
supplies |
|
|
— |
|
|
|
— |
|
|
|
(32,546 |
) |
|
|
|
|
Tax Season impacts recognized in July 2020 |
|
|
— |
|
|
|
— |
|
|
|
(204,060 |
) |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
(236,606 |
) |
|
|
|
|
Pretax income |
|
$ |
659,069 |
|
|
$ |
797,133 |
|
|
$ |
560,527 |
|
|
$ |
98,542 |
|
|
17.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations - as reported |
|
$ |
560,646 |
|
|
$ |
690,458 |
|
|
$ |
690,458 |
|
|
$ |
(129,812 |
) |
|
(18.8 |
)% |
Adjustments - normalization: |
|
|
|
|
|
|
|
|
|
|
Impacts of Emerald Card Stimulus and pandemic related sick pay and
supplies (pretax) |
|
|
— |
|
|
|
— |
|
|
|
(32,546 |
) |
|
|
|
|
Tax Season impacts recognized in July 2020 (pretax) |
|
|
— |
|
|
|
— |
|
|
|
(204,060 |
) |
|
|
|
|
Tax effect of adjustments |
|
|
— |
|
|
|
— |
|
|
|
55,023 |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
(181,583 |
) |
|
|
|
|
Net income from continuing operations |
|
$ |
560,646 |
|
|
$ |
690,458 |
|
|
$ |
508,875 |
|
|
$ |
51,771 |
|
|
10.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
Adjustments to net income from
continuing operations: |
|
|
|
|
|
|
|
|
|
|
Amortization of intangibles related to acquisitions (pretax) |
|
|
56,292 |
|
|
|
66,246 |
|
|
|
66,246 |
|
|
|
|
|
Tax effect of adjustments(2) |
|
|
(13,358 |
) |
|
|
(16,237 |
) |
|
|
(16,237 |
) |
|
|
|
|
Adjusted net income
from continuing operations |
|
$ |
603,580 |
|
|
$ |
740,467 |
|
|
$ |
558,884 |
|
|
$ |
44,696 |
|
|
8.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
from continuing operations - as reported |
|
$ |
3.26 |
|
|
$ |
3.67 |
|
|
$ |
3.67 |
|
|
$ |
(0.41 |
) |
|
(11.2 |
)% |
Adjustments to normalize net
income, net of tax |
|
|
— |
|
|
|
— |
|
|
|
(0.97 |
) |
|
|
|
|
Adjustments to remove
amortization of intangibles, net of tax |
|
|
0.25 |
|
|
|
0.27 |
|
|
|
0.27 |
|
|
|
|
|
Adjusted diluted
earnings per share from continuing operations |
|
$ |
3.51 |
|
|
$ |
3.94 |
|
|
$ |
2.97 |
|
|
$ |
0.54 |
|
|
18.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
(1) The variance is calculated as the difference
between the year ended June 30, 2022 and the normalized year ended
June 30, 2021.(2) The tax effect of adjustments is the difference
between the tax provision calculation on a GAAP basis and on an
adjusted non-GAAP basis.
(in 000s) |
NON-GAAP FINANCIAL MEASURE - EBITDA |
|
Year EndedJune 30, 2022 |
|
Year EndedJune 30, 2021 |
|
NormalizedYear EndedJune 30, 2021 |
|
Variance(1) |
|
|
|
|
$ |
% |
|
|
|
|
|
|
|
|
|
|
|
Net income - as reported |
|
$ |
553,674 |
|
|
$ |
683,949 |
|
|
|
|
|
|
|
Discontinued operations, net |
|
|
(6,972 |
) |
|
|
(6,509 |
) |
|
|
|
|
|
|
Net income from continuing operations(2) |
|
|
560,646 |
|
|
|
690,458 |
|
|
|
508,875 |
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
Income taxes |
|
|
98,423 |
|
|
|
106,675 |
|
|
|
51,652 |
|
|
|
|
|
Interest expense |
|
|
88,282 |
|
|
|
99,491 |
|
|
|
99,491 |
|
|
|
|
|
Depreciation and amortization |
|
|
142,178 |
|
|
|
154,818 |
|
|
|
154,818 |
|
|
|
|
|
|
|
|
328,883 |
|
|
|
360,984 |
|
|
|
305,961 |
|
|
|
|
|
EBITDA from continuing operations |
|
$ |
889,529 |
|
|
$ |
1,051,442 |
|
|
$ |
814,836 |
|
|
$ |
74,693 |
|
|
9.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
(1) The variance is calculated as the difference
between the year ended June 30, 2022 and the normalized year ended
June 30, 2021.(2) Net income from continuing operations for the
normalized year ended June 30, 2021 is computed in the preceding
table.
|
|
|
|
(in 000s) |
|
|
Three months ended June 30, |
NON-GAAP FINANCIAL MEASURE - EBITDA |
|
2022 |
|
2021 |
|
|
|
|
|
Net income - as reported |
|
$ |
222,703 |
|
|
$ |
243,709 |
|
Discontinued operations, net |
|
|
(1,988 |
) |
|
|
(1,976 |
) |
Net income from continuing operations - as reported |
|
|
224,691 |
|
|
|
245,685 |
|
Add back: |
|
|
|
|
Income taxes |
|
|
68,757 |
|
|
|
55,678 |
|
Interest expense |
|
|
18,621 |
|
|
|
20,834 |
|
Depreciation and amortization |
|
|
34,716 |
|
|
|
37,782 |
|
|
|
|
122,094 |
|
|
|
114,294 |
|
EBITDA from continuing operations |
|
$ |
346,785 |
|
|
$ |
359,979 |
|
|
|
|
|
|
|
|
(in 000s, except per share amounts) |
|
|
Three months ended June 30, |
NON-GAAP FINANCIAL MEASURE - ADJUSTED EPS |
|
2022 |
|
2021 |
|
|
|
|
|
Net income from continuing operations - as reported |
|
$ |
224,691 |
|
|
$ |
245,685 |
|
|
|
|
|
|
Adjustments: |
|
|
|
|
Amortization of intangibles related to acquisitions (pretax) |
|
|
13,151 |
|
|
|
15,848 |
|
Tax effect of adjustments(1) |
|
|
(3,256 |
) |
|
|
(3,648 |
) |
Adjusted net income from continuing operations |
|
$ |
234,586 |
|
|
$ |
257,885 |
|
|
|
|
|
|
Diluted earnings per share
from continuing operations - as reported |
|
$ |
1.37 |
|
|
$ |
1.32 |
|
Adjustments, net of tax |
|
|
0.06 |
|
|
|
0.07 |
|
Adjusted diluted earnings per
share from continuing operations |
|
$ |
1.43 |
|
|
$ |
1.39 |
|
|
|
|
|
|
(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. The normalized measures are intended to provide
additional context around our results for the year ended June 30,
2021 by showing the impacts of the extended 2020 tax season. 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, normalized revenues,
normalized pretax income, normalized EBITDA from continuing
operations, normalized adjusted diluted earnings per share 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.
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