VIRGINIA BEACH, VA - (Marketwired) - December 09, 2015 - Liberty Tax, Inc. (NASDAQ: TAX) (the "Company"), the parent company of Liberty Tax Service, today reported results for the second quarter ended October 31, 2015.
"We are looking forward to the coming tax season," said John Hewitt, CEO. "We expect to see expansion in our store count and strong growth in existing store return counts reflecting a good market environment for paid tax preparation and new product offerings."
Due to the highly seasonal nature of the tax industry, the Company typically reports a loss in the first and second quarters of the fiscal year when revenues are low and costs are ramping up to drive growth in the following tax season. The Company had a reported and adjusted net loss for the fiscal second quarter ended October 31, 2015, of $9.1 million, or $0.71 per share, compared to a reported loss of $0.89 per share and an adjusted loss of $0.74 per share, in the prior period.
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Revenue for the three months ended October 31, 2015 remained essentially flat, increasing to $7.9 million compared to $7.7 million in the prior year period.
Operating expenses for the three months ended October 31, 2015 decreased to $21.9 million driven by lower commission and Area Developer ("AD") expense along with lower depreciation and amortization. In addition, during the prior year we incurred severance and legal settlement costs which were adjusted out in the non-GAAP results, and did not recur this period.
The Company has drawn $57.3 million on its revolving credit facility as of October 31, 2015, compared to $51.7 million as of October 31, 2014. This increase was the result of the Company's payment of previously accrued legal settlements as well as an increase in franchisee lending.
On a year to date basis through November, the Company has sold 141 new U.S. and Canadian territories, compared to 127 new territories during the prior year period. In addition, 11 franchisees have sold their SiempreTax+ rights to other operators who plan to open new SiempreTax+ locations. In order to project total office count, other factors, including the opening of previously sold territories and terminations, must be considered. The Company expects the total office count to increase over last year.
This week the Board of Directors approved our fourth consecutive quarterly dividend to shareholders of $0.16 per share. The dividend will be paid on January 22, 2016 to holders of record of common stock and common stock equivalents on the close of business on January 15, 2016.
At 8:30 a.m. Eastern time on Wednesday, December 9, 2015, the Company will host a conference call for analysts, institutional investors and stockholders. To access the call, please dial the number below approximately 5 to 10 minutes prior to the scheduled starting time:
U.S. 855-611-0856
International 518-444-5569
Conference ID Code: 81697221
The call will also be webcast in a listen-only format. The link to the webcast can be accessed on the Company's investor relations website at www.libertytax.com, under the "About" tab.
A telephonic replay of the call will be available beginning shortly after the call continuing until Wednesday, December 16, 2015, by dialing 855-859-2056 (domestic) or 404-537-3406 (international). The conference ID code is 81697221. A replay of the webcast will also be available at the site listed above beginning shortly after its conclusion.
Founded in 1997 by CEO John T. Hewitt, Liberty Tax, Inc., is the parent company of Liberty Tax Service. Liberty Tax is the fastest-growing tax preparation franchise and has prepared almost 20 million individual income tax returns in more than 4,300 offices and online. Liberty Tax's online services are available through eSmart Tax, Liberty Online and DIY Tax, and are all backed by the tax professionals at Liberty Tax locations and its nationwide network of approximately 35,000 seasonal tax preparers. Liberty Tax also supports local communities with fundraising endeavors and contributes as a national sponsor for many charitable causes. For a more in-depth look, visit Liberty Tax Service and interact with Liberty Tax on Twitter and Facebook.
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 U.S. generally accepted accounting principles, please see the section of the accompanying Tables E and F titled "Non-GAAP Financial Information."
In addition to historical information, this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including implied and express statements regarding future growth. These forward-looking statements, as well as Company guidance, are based upon the Company's current expectations and there can be no assurance that such expectations will prove to be correct. Because forward-looking statements involve risks and uncertainties and speak only as of the date on which they are made, the Company's actual results could differ materially from these statements. These risks and uncertainties relate to, among other things: uncertainties regarding the Company's ability to attract and retain clients; the ability to continue to pay a quarterly dividend; the effect of health care reform and immigration reform on tax preparation-related revenue; the impact of the launch of a new franchise brand; uncertainties regarding the Company's ability to meet its prepared returns targets; competitive factors; the Company's effective income tax rate; litigation defense expenses and costs of judgments or settlements; and changes in market, economic, political or regulatory conditions. Information concerning these risks and uncertainties is contained in the Company's annual report on Form 10-K and in other filings by the Company with the U.S. Securities and Exchange Commission. The Company does not undertake any duty to update any forward-looking statements, whether as a result of new information, future events, or otherwise.
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SOURCE Liberty Tax, Inc.
Kathy Donovan
Investor Relations
Liberty Tax, Inc.
Vice President, Chief Financial Officer
(757) 493-8855
investorrelations@libtax.com
Martha O'Gorman
Media Relations
Liberty Tax, Inc.
Chief Marketing Officer
(757) 301-8022
martha@libtax.com