Jackson Hewitt Reports Preliminary 2010 Tax Filing Results
PARSIPPANY, N.J. // PRNewswire-FirstCall // -- Jackson Hewitt Tax Service Inc. ("Jackson Hewitt") (NYSE: JTX) today reported preliminary tax filing results for the fiscal year ending April 30, 2010.
Jackson Hewitt's network of franchised and company-owned offices prepared 2.530 million tax returns in 2010, versus 2.955 million tax returns prepared in the prior fiscal year, or a decline of 14.4%. This year-over-year decline in returns prepared was favorable compared to the previously communicated guidance of a decline in the range of 17% to 19% due to better than forecasted performance in the second half of the tax season.
"The 2010 tax season was a disappointing one for Jackson Hewitt," said Harry W. Buckley, Jackson Hewitt's president and chief executive officer. "Despite the solid efforts of our employees and franchisees, the headwinds from a soft economy, high unemployment, competitive pressure and the absence of a RAL product, resulted in a year of declining tax returns prepared, revenues and earnings."
"Our focus at this time is steadfastly on the future," continued Buckley. "In an effort to position Jackson Hewitt for an improved 2011 tax season, we, along with franchisee representatives, are working toward completion of a detailed strategic business plan, as well as completion of a mutually beneficial new franchise agreement. We are continuing our intensive efforts to identify a resolution of the RAL product issue, which is our top off-season priority. Our dedicated Walmart team is working closely with Walmart to plan for the 2011 tax season and to optimize the opportunity presented by this exclusive arrangement. We rolled out our first ever online product this past tax season, and look to further grow this distribution channel in 2011. We also completed an organizational restructuring on April 30 that reduced our full-time staff by 15% and will result in a streamlined, more efficient organization that we believe will lead to enhanced accountability and improved results."
"Underlying all of these initiatives will be a continued emphasis on overall client satisfaction – delivering the products, services and value that will improve client retention, attract new clients to the Jackson Hewitt brand and ultimately produce financial results that will enhance the value of our company," concluded Buckley.
Based on the preliminary tax filing results, Jackson Hewitt expects average revenues per tax return for the 2010 fiscal year, versus the 2009 fiscal year, to increase 1.0%, reflecting the low end of the previously provided guidance range of 1% to 2%. Further, Jackson Hewitt expects total revenues for the 2010 fiscal year to be in the range of $211 million to $214 million, and anticipates earnings will be modestly positive, excluding non-recurring items. These adjusted earnings will exclude various restructuring, goodwill impairment and tax valuation charges, employee severance and other non-operational expenses, all of which will be detailed in a schedule entitled Condensed Adjusted Results of Operations accompanying our Earnings Release on July 14, 2010.
Jackson Hewitt Lowers Cost Structure for 2011 through Workforce Realignment
As previously announced on May 3, 2010, in connection with an organizational restructuring, Jackson Hewitt's overall consolidated workforce was reduced by approximately 15%. As a result of this action, Jackson Hewitt will record a 2010 fourth quarter pre-tax severance charge of approximately $1 million. Jackson Hewitt expects that this restructuring will achieve pre-tax expense savings of approximately $5 million in the 2011 fiscal year.
Fiscal Year 2010 Reporting Date and Analyst Conference Call
Jackson Hewitt will report its fiscal 2010 results prior to the opening of trading on the New York Stock Exchange on Wednesday, July 14, 2010. On the same morning at 8:30 a.m. (EDT), Harry W. Buckley, president and chief executive officer, and Daniel P. O'Brien, chief financial officer, will host an analyst conference call to discuss the 2010 fiscal year results and the initiatives already underway for next tax season. The press release will be available at the Investor Relations tab of Jackson Hewitt's website. The conference call will be simulcast live and a replay will be available on the Internet through the same website.
About Jackson Hewitt Tax Service Inc.
Jackson Hewitt Tax Service Inc. (NYSE: JTX), with more than 6,300 franchised and company-owned offices throughout the United States in the 2010 tax season, is an industry leader providing full service individual federal and state income tax return preparation. Most offices are independently owned and operated.
This press release contains statements, including, without limitation, those statements related to the full year projections for average revenues per return, total revenues and adjusted earnings, which are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Because these forward-looking statements involve risks and uncertainties, actual results may differ materially from those expressed or implied in the forward-looking statements due to a number of factors, including but not limited to: Jackson Hewitt's ability to execute on its strategic plan and reverse its declining profitability, improve its distribution system or reduce its cost structure; Jackson Hewitt's ability to successfully attract and retain key personnel; government initiatives that simplify tax return preparation or reduce the need for a third party tax return preparer, improve the timing and efficiency of processing tax returns or decrease the number of tax returns filed; delays in the passage of tax laws and their implementation; the success of Jackson Hewitt's franchised offices; Jackson Hewitt's responsibility to third parties, regulators or courts for the acts of, or failures to act by, Jackson Hewitt's franchisees or their employees; government legislation and regulation of the tax return preparation industry and related financial products, including refund anticipation loans, and the failure by Jackson Hewitt, or the financial institutions which provide financial products to Jackson Hewitt's customers, to comply with such legal and regulatory requirements; the effectiveness of Jackson Hewitt's tax return preparation compliance program; increased regulation of tax return preparers; Jackson Hewitt's exposure to litigation; the failure of Jackson Hewitt's insurance to cover all the risks associated with its business; Jackson Hewitt's ability to protect its customers' personal and financial information; the effectiveness of Jackson Hewitt's marketing and advertising programs and franchisee support of these programs; disruptions in Jackson Hewitt's relationships with its franchisees; changes in Jackson Hewitt's relationships with financial product providers that could reduce the revenues Jackson Hewitt derives from its agreements with these financial institutions as well as affect Jackson Hewitt's customers' ability to obtain financial products through its tax return preparation offices; changes in Jackson Hewitt's relationship with Walmart or other large retailers and shopping malls that could affect Jackson Hewitt's growth and profitability; the seasonality of Jackson Hewitt's business and its effect on Jackson Hewitt's stock price; competition from tax return preparation service providers, volunteer organizations and the government; Jackson Hewitt's reliance on technology systems and electronic communications to perform the core functions of its business; Jackson Hewitt's ability to protect its intellectual property rights or defend against any third party allegations of infringement by Jackson Hewitt; Jackson Hewitt's reliance on cash flow from subsidiaries; Jackson Hewitt's compliance with credit facility covenants; Jackson Hewitt's exposure to increases in prevailing market interest rates; Jackson Hewitt's quarterly results not being indicative of its performance as a result of tax season being relatively short and straddling two quarters; certain provisions that may hinder, delay or prevent third party takeovers; changes in accounting policies or practices and Jackson Hewitt's ability to maintain an effective system of internal controls; impairment charges related to goodwill; and the effect of market conditions, general conditions in the tax return preparation industry or general economic conditions.
Additional information concerning these and other risks that could impact Jackson Hewitt's business can be found in Jackson Hewitt's Annual Report on Form 10- K for the fiscal year ended April 30, 2009, and other public filings with the Securities and Exchange Commission ("SEC"). Copies are available from the SEC or Jackson Hewitt's website. Jackson Hewitt assumes no obligation, and Jackson Hewitt expressly disclaims any obligation, to update or alter any forward-looking statements.
SOURCE Jackson Hewitt Tax Service Inc.