H&R Block, Inc. (NYSE: HRB) (the "Company") today released its
financial results1 for the fiscal 2023 second quarter ended
December 31, 2022.
- Revenue grew 5% and
the Company saw a strong ending to the 2022 tax season
- The Company reiterates
its previously provided fiscal year 2023 outlook
- Repurchased
$130.4 million of shares in the quarter, another 2% of shares
outstanding
- SpruceSM, the new
mobile banking platform, was launched in the Assisted channel in
January
"Our second quarter results demonstrate ongoing
momentum across our business, and I am pleased with the path we are
on," said Jeff Jones, H&R Block's president and chief executive
officer. "We continue to make progress in our Block Horizons
journey and feel well positioned for the 2023 tax season. By
blending technology with human help, we are empowering clients to
choose how they want to be served at tax time — fully virtually, or
fully in person, and everything in between."
Fiscal 2023 Second Quarter Results and Key
Financial Metrics
"We performed well in the second quarter, managed
expenses effectively, and continued to return value to shareholders
through our capital allocation," said Tony Bowen, H&R Block's
chief financial officer. "We repurchased 3.2 million shares in the
quarter. In the first half of the year, we retired a total of 5% of
shares outstanding for $350 million. We are also pleased to
reiterate our full year outlook for 2023, which calls for topline
growth, EBITDA that outpaces revenue, and EPS that grows even
faster."
- Total revenue of
$166.4 million, increased by $7.6 million, or 5%, to the prior
year. The increase was primarily driven by volumes and net average
charge as we had a strong end to the 2022 tax season, partially
offset by lower Emerald Card revenues related to the impact of
Advanced Child Tax Credit payments in the prior year.
- Total operating
expenses of $449.6 million increased by $13.5 million, or 3%,
primarily due to higher corporate and field wages, along with
increased bad debt expense, which was partially offset by lower
consulting and outsourced services as well as favorable
developments in insurance loss reserves.
- Pretax loss was
effectively flat to the prior year at $298.0 million.
- Loss per share from
continuing operations2 increased from $(1.09) to $(1.43) and
adjusted loss per share2 from continuing operations increased from
$(1.02) to $(1.37), primarily due to the larger net loss from lower
income tax benefits in the quarter and fewer shares
outstanding.
Capital Structure
The Company reported the following related to its
capital structure:
- Repurchased and
retired 3.2 million shares for $130.4 million, or 2% of shares
outstanding. The Company has approximately $900.0 million remaining
on its latest $1.25 billion authorization available through fiscal
year 2025.
- As previously
announced, a quarterly cash dividend of $0.29 per share is payable
on April 5, 2023 to shareholders of record as of March 7, 2023.
H&R Block has paid quarterly dividends consecutively for over
sixty years, since the Company became public in 1962.
Since 2016, the Company has returned over $3
billion to shareholders in the form of share repurchases and
dividends, buying back over one third of its shares
outstanding3.
Fiscal Year 2023 Outlook
Reaffirmed
The Company continues to expect:
- Revenue to be in the
range of $3.535 to $3.585 billion
- EBITDA4 to be in the
range of $915 to $950 million
- Effective tax rate to
be approximately 22%
- Adjusted diluted
earnings per share4 to be in the range of $3.70 to $3.95
- Double-digit adjusted
diluted earnings per share4 growth annually through 2025
Conference CallA conference call
for analysts, institutional investors, and shareholders will be
held at 4:30 p.m. Eastern time on Tuesday, February 7, 2023. During
the conference call the company will discuss fiscal 2023 second
quarter results, outlook, and give a general business update. To
join live, participants must register at
https://register.vevent.com/register/BId8885f32eac141fe9a86d51d888e5810.
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/o83t7vbn 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," "calls for,"
"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 June 30, 2022 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 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 December 31, |
|
Six months ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
REVENUES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. tax preparation and related services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assisted tax preparation |
|
$ |
41,216 |
|
|
$ |
30,845 |
|
|
$ |
77,528 |
|
|
$ |
64,452 |
|
Royalties |
|
|
4,946 |
|
|
|
3,404 |
|
|
|
11,174 |
|
|
|
10,762 |
|
DIY tax preparation |
|
|
12,150 |
|
|
|
9,210 |
|
|
|
15,308 |
|
|
|
13,271 |
|
Refund Transfers |
|
|
1,542 |
|
|
|
777 |
|
|
|
2,826 |
|
|
|
2,442 |
|
Peace of Mind® Extended Service Plan |
|
|
17,320 |
|
|
|
17,315 |
|
|
|
42,090 |
|
|
|
42,151 |
|
Tax Identity Shield® |
|
|
5,350 |
|
|
|
5,200 |
|
|
|
10,517 |
|
|
|
10,353 |
|
Other |
|
|
8,513 |
|
|
|
7,407 |
|
|
|
17,873 |
|
|
|
17,152 |
|
Total U.S. tax preparation and related services |
|
|
91,037 |
|
|
|
74,158 |
|
|
|
177,316 |
|
|
|
160,583 |
|
Financial services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emerald Card® and SpruceSM |
|
|
12,478 |
|
|
|
24,830 |
|
|
|
24,090 |
|
|
|
53,088 |
|
Interest and fee income on Emerald AdvanceSM |
|
|
12,903 |
|
|
|
12,424 |
|
|
|
13,517 |
|
|
|
12,903 |
|
Total financial services |
|
|
25,381 |
|
|
|
37,254 |
|
|
|
37,607 |
|
|
|
65,991 |
|
International |
|
|
28,046 |
|
|
|
27,907 |
|
|
|
86,880 |
|
|
|
86,232 |
|
Wave |
|
|
21,941 |
|
|
|
19,497 |
|
|
|
44,587 |
|
|
|
38,634 |
|
Total revenues |
|
$ |
166,405 |
|
|
$ |
158,816 |
|
|
$ |
346,390 |
|
|
$ |
351,440 |
|
Compensation and benefits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Field wages |
|
|
76,204 |
|
|
|
70,058 |
|
|
|
137,877 |
|
|
|
126,137 |
|
Other wages |
|
|
70,530 |
|
|
|
64,067 |
|
|
|
134,283 |
|
|
|
122,131 |
|
Benefits and other compensation |
|
|
34,277 |
|
|
|
30,207 |
|
|
|
69,109 |
|
|
|
55,657 |
|
|
|
|
181,011 |
|
|
|
164,332 |
|
|
|
341,269 |
|
|
|
303,925 |
|
Occupancy |
|
|
101,173 |
|
|
|
99,296 |
|
|
|
198,763 |
|
|
|
195,118 |
|
Marketing and advertising |
|
|
15,142 |
|
|
|
17,141 |
|
|
|
25,791 |
|
|
|
27,214 |
|
Depreciation and amortization |
|
|
32,723 |
|
|
|
35,631 |
|
|
|
66,347 |
|
|
|
71,346 |
|
Bad debt |
|
|
22,416 |
|
|
|
13,666 |
|
|
|
22,745 |
|
|
|
14,709 |
|
Other |
|
|
97,143 |
|
|
|
106,050 |
|
|
|
183,789 |
|
|
|
191,200 |
|
Total operating expenses |
|
|
449,608 |
|
|
|
436,116 |
|
|
|
838,704 |
|
|
|
803,512 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense), net |
|
|
4,185 |
|
|
|
1,467 |
|
|
|
7,796 |
|
|
|
1,751 |
|
Interest expense on borrowings |
|
|
(18,985 |
) |
|
|
(23,085 |
) |
|
|
(34,809 |
) |
|
|
(45,915 |
) |
Pretax loss |
|
|
(298,003 |
) |
|
|
(298,918 |
) |
|
|
(519,327 |
) |
|
|
(496,236 |
) |
Income tax benefit |
|
|
(77,140 |
) |
|
|
(109,845 |
) |
|
|
(131,097 |
) |
|
|
(157,218 |
) |
Net loss from continuing operations |
|
|
(220,863 |
) |
|
|
(189,073 |
) |
|
|
(388,230 |
) |
|
|
(339,018 |
) |
Net loss from discontinued operations |
|
|
(2,716 |
) |
|
|
(1,532 |
) |
|
|
(3,770 |
) |
|
|
(3,188 |
) |
Net loss |
|
$ |
(223,579 |
) |
|
$ |
(190,605 |
) |
|
$ |
(392,000 |
) |
|
$ |
(342,206 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC AND DILUTED LOSS PER SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
(1.43 |
) |
|
$ |
(1.09 |
) |
|
$ |
(2.48 |
) |
|
$ |
(1.93 |
) |
Discontinued operations |
|
|
(0.02 |
) |
|
|
(0.01 |
) |
|
|
(0.02 |
) |
|
|
(0.02 |
) |
Consolidated |
|
$ |
(1.45 |
) |
|
$ |
(1.10 |
) |
|
$ |
(2.50 |
) |
|
$ |
(1.95 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE DILUTED SHARES |
|
|
154,119 |
|
|
|
173,378 |
|
|
|
156,701 |
|
|
|
175,739 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted diluted EPS (1) |
|
$ |
(1.37 |
) |
|
$ |
(1.02 |
) |
|
$ |
(2.36 |
) |
|
$ |
(1.80 |
) |
EBITDA (1) |
|
$ |
(246,295 |
) |
|
$ |
(240,202 |
) |
|
$ |
(418,171 |
) |
|
$ |
(378,975 |
) |
|
|
|
|
|
|
|
|
|
(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 |
|
December 31, 2022 |
|
June 30, 2022 |
|
|
|
|
|
ASSETS |
|
|
|
|
Cash and cash equivalents |
|
$ |
264,455 |
|
|
$ |
885,015 |
|
Cash and cash equivalents - restricted |
|
|
27,733 |
|
|
|
165,698 |
|
Receivables, net |
|
|
328,616 |
|
|
|
58,447 |
|
Income taxes receivable |
|
|
46,646 |
|
|
|
202,838 |
|
Prepaid expenses and other current assets |
|
|
108,405 |
|
|
|
72,460 |
|
Total current assets |
|
|
775,855 |
|
|
|
1,384,458 |
|
Property and equipment, net |
|
|
136,824 |
|
|
|
123,912 |
|
Operating lease right of use assets |
|
|
382,723 |
|
|
|
427,783 |
|
Intangible assets, net |
|
|
304,539 |
|
|
|
309,644 |
|
Goodwill |
|
|
764,802 |
|
|
|
760,401 |
|
Deferred tax assets and income taxes receivable |
|
|
181,721 |
|
|
|
208,948 |
|
Other noncurrent assets |
|
|
46,760 |
|
|
|
54,012 |
|
Total assets |
|
$ |
2,593,224 |
|
|
$ |
3,269,158 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
LIABILITIES: |
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
137,118 |
|
|
$ |
160,929 |
|
Accrued salaries, wages and payroll taxes |
|
|
68,089 |
|
|
|
154,764 |
|
Accrued income taxes and reserves for uncertain tax positions |
|
|
73,572 |
|
|
|
280,115 |
|
Operating lease liabilities |
|
|
184,343 |
|
|
|
206,898 |
|
Deferred revenue and other current liabilities |
|
|
182,711 |
|
|
|
196,107 |
|
Total current liabilities |
|
|
645,833 |
|
|
|
998,813 |
|
Long-term debt and line of credit borrowings |
|
|
2,067,937 |
|
|
|
1,486,876 |
|
Deferred tax liabilities and reserves for uncertain tax
positions |
|
|
231,041 |
|
|
|
226,362 |
|
Operating lease liabilities |
|
|
205,409 |
|
|
|
228,820 |
|
Deferred revenue and other noncurrent liabilities |
|
|
86,483 |
|
|
|
116,656 |
|
Total liabilities |
|
|
3,236,703 |
|
|
|
3,057,527 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
STOCKHOLDERS’ EQUITY: |
|
|
|
|
Common stock, no par, stated value $.01 per share |
|
|
1,854 |
|
|
|
1,936 |
|
Additional paid-in capital |
|
|
767,683 |
|
|
|
772,182 |
|
Accumulated other comprehensive loss |
|
|
(44,683 |
) |
|
|
(21,645 |
) |
Retained earnings (deficit) |
|
|
(708,437 |
) |
|
|
120,405 |
|
Less treasury shares, at cost |
|
|
(659,896 |
) |
|
|
(661,247 |
) |
Total stockholders' equity (deficiency) |
|
|
(643,479 |
) |
|
|
211,631 |
|
Total liabilities and stockholders' equity |
|
$ |
2,593,224 |
|
|
$ |
3,269,158 |
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
(unaudited, in 000s) |
|
Six months ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
Net loss |
|
$ |
(392,000 |
) |
|
$ |
(342,206 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
Depreciation and amortization |
|
|
66,347 |
|
|
|
71,346 |
|
Provision |
|
|
16,581 |
|
|
|
14,639 |
|
Deferred taxes |
|
|
41,534 |
|
|
|
16,685 |
|
Stock-based compensation |
|
|
17,893 |
|
|
|
13,233 |
|
Changes in assets and liabilities, net of acquisitions: |
|
|
|
|
Receivables |
|
|
(262,293 |
) |
|
|
(216,071 |
) |
Prepaid expenses, other current and noncurrent assets |
|
|
(32,983 |
) |
|
|
(46,928 |
) |
Accounts payable, accrued expenses, salaries, wages and payroll
taxes |
|
|
(121,156 |
) |
|
|
(121,926 |
) |
Deferred revenue, other current and noncurrent liabilities |
|
|
(52,703 |
) |
|
|
(50,882 |
) |
Income tax receivables, accrued income taxes and income tax
reserves |
|
|
(60,163 |
) |
|
|
(247,088 |
) |
Other, net |
|
|
(1,515 |
) |
|
|
(4,373 |
) |
Net cash used in operating activities |
|
|
(780,458 |
) |
|
|
(913,571 |
) |
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Capital expenditures |
|
|
(41,495 |
) |
|
|
(39,371 |
) |
Payments made for business acquisitions, net of cash acquired |
|
|
(39,757 |
) |
|
|
(19,333 |
) |
Franchise loans funded |
|
|
(17,491 |
) |
|
|
(14,480 |
) |
Payments from franchisees |
|
|
3,861 |
|
|
|
6,213 |
|
Other, net |
|
|
(4,208 |
) |
|
|
9,527 |
|
Net cash used in investing activities |
|
|
(99,090 |
) |
|
|
(57,444 |
) |
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Repayments of line of credit borrowings |
|
|
(170,000 |
) |
|
|
(210,000 |
) |
Proceeds from line of credit borrowings |
|
|
750,000 |
|
|
|
485,000 |
|
Dividends paid |
|
|
(89,193 |
) |
|
|
(96,938 |
) |
Repurchase of common stock, including shares surrendered |
|
|
(365,633 |
) |
|
|
(324,589 |
) |
Proceeds from exercise of stock options |
|
|
1,427 |
|
|
|
4,067 |
|
Other, net |
|
|
2,212 |
|
|
|
(7,423 |
) |
Net cash provided by (used in) financing activities |
|
|
128,813 |
|
|
|
(149,883 |
) |
|
|
|
|
|
Effects of exchange rate changes on cash |
|
|
(7,790 |
) |
|
|
(3,330 |
) |
|
|
|
|
|
Net decrease in cash and cash equivalents, including restricted
balances |
|
|
(758,525 |
) |
|
|
(1,124,228 |
) |
Cash, cash equivalents and restricted cash, beginning of
period |
|
|
1,050,713 |
|
|
|
1,584,164 |
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
292,188 |
|
|
$ |
459,936 |
|
|
|
|
|
|
SUPPLEMENTARY CASH FLOW DATA: |
|
|
|
|
Income taxes paid (received), net |
|
$ |
(114,385 |
) |
|
$ |
72,169 |
|
Interest paid on borrowings |
|
|
31,812 |
|
|
|
36,539 |
|
Accrued additions to property and equipment |
|
|
2,499 |
|
|
|
1,393 |
|
New operating right of use assets and related lease
liabilities |
|
|
79,917 |
|
|
|
73,710 |
|
Accrued dividends payable to common shareholders |
|
|
44,569 |
|
|
|
46,497 |
|
Accrued purchase of common stock |
|
|
— |
|
|
|
4,845 |
|
|
|
|
|
|
(in 000s) |
|
|
|
Three months ended December 31, |
|
Six months ended December 31, |
NON-GAAP FINANCIAL MEASURE - EBITDA |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
Net loss - as reported |
|
$ |
(223,579 |
) |
|
$ |
(190,605 |
) |
|
$ |
(392,000 |
) |
|
$ |
(342,206 |
) |
Discontinued operations, net |
|
|
2,716 |
|
|
|
1,532 |
|
|
|
3,770 |
|
|
|
3,188 |
|
Net loss from continuing
operations - as reported |
|
|
(220,863 |
) |
|
|
(189,073 |
) |
|
|
(388,230 |
) |
|
|
(339,018 |
) |
Add back: |
|
|
|
|
|
|
|
|
Income tax benefit |
|
|
(77,140 |
) |
|
|
(109,845 |
) |
|
|
(131,097 |
) |
|
|
(157,218 |
) |
Interest expense |
|
|
18,985 |
|
|
|
23,085 |
|
|
|
34,809 |
|
|
|
45,915 |
|
Depreciation and amortization |
|
|
32,723 |
|
|
|
35,631 |
|
|
|
66,347 |
|
|
|
71,346 |
|
|
|
|
(25,432 |
) |
|
|
(51,129 |
) |
|
|
(29,941 |
) |
|
|
(39,957 |
) |
EBITDA from continuing operations |
|
$ |
(246,295 |
) |
|
$ |
(240,202 |
) |
|
$ |
(418,171 |
) |
|
$ |
(378,975 |
) |
|
|
|
|
|
|
|
|
|
(in 000s, except per share amounts) |
|
|
|
Three months ended December 31, |
|
Six months ended December 31, |
NON-GAAP FINANCIAL MEASURE - ADJUSTED EPS |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
Net loss from continuing operations - as reported |
|
$ |
(220,863 |
) |
|
$ |
(189,073 |
) |
|
$ |
(388,230 |
) |
|
$ |
(339,018 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
Amortization of intangibles related to acquisitions (pretax) |
|
|
12,839 |
|
|
|
14,292 |
|
|
|
25,535 |
|
|
|
29,162 |
|
Tax effect of adjustments (1) |
|
|
(2,787 |
) |
|
|
(1,922 |
) |
|
|
(6,008 |
) |
|
|
(5,557 |
) |
Adjusted net loss from continuing operations |
|
$ |
(210,811 |
) |
|
$ |
(176,703 |
) |
|
$ |
(368,703 |
) |
|
$ |
(315,413 |
) |
Diluted loss per share from
continuing operations - as reported |
|
$ |
(1.43 |
) |
|
$ |
(1.09 |
) |
|
$ |
(2.48 |
) |
|
$ |
(1.93 |
) |
Adjustments, net of tax |
|
|
0.06 |
|
|
|
0.07 |
|
|
|
0.12 |
|
|
|
0.13 |
|
Adjusted diluted loss per
share from continuing operations |
|
$ |
(1.37 |
) |
|
$ |
(1.02 |
) |
|
$ |
(2.36 |
) |
|
$ |
(1.80 |
) |
|
|
|
|
|
|
|
|
|
(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 of continuing operations, each subject to
permitted adjustments, as performance metrics in incentive
compensation calculations for our employees.
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