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H&R Block To Cut 350 Jobs, Close 200 Offices; Begins Search For New CFO

H&R Block, Inc. (HRB), the largest U.S. tax preparer, said Wednesday that it will eliminate 350 jobs and close about 200 underperforming company-owned offices as part of a strategic realignment. Looking ahead to fiscal 2012, the company forecast earnings and revenue below analysts' expectations. H&R Block's shares fell 16 percent in extended trade following the news.

Further, H&R Block said it has retained Crist|Kolder Associates to lead the search for a new chief financial officer. Current CFO Jeff Brown will remain with the company and continue to serve as CFO during the search for a successor.

Once a successor is found, Brown will transition to the position of chief accounting and risk officer, where he will oversee all aspects of the company's accounting function and coordinate its enterprise risk management approach.

As part of the strategic realignment, Kansas, Missouri-based H&R Block said it is offering a voluntary separation program to eligible employees throughout the organization.

The company plans to eliminate about 350 full-time positions throughout its Kansas City headquarters and nationwide field organization. In the event it does not achieve the job cuts from the voluntary program, the company said that involuntary separations will follow.

Overall, H&R Block expects to realize net annualized savings of $85 million to $100 million by the end of fiscal year 2013 as a result of the strategic realignment.

H&R Block also announced an organizational realignment, including the formation of U.S. Client Services. The four executives leading this unit will all directly report to Cobb. Meanwhile, Phil Mazzini, President of Retail Tax Services, has resigned from the company effective April 30, 2012.

The company expects to incur a pretax charge for lease termination, severance and related costs of about $30 million, or $0.06 per share, which will be recorded in the fourth quarter ending April 30.

For fiscal 2012, H&R Block expects total revenues of about $2.9 billion and earnings from continuing operations of $1.09 to $1.15 per share.

On average, analysts polled by Thomson Reuters expect the company to report earnings of $1.39 per share on revenues of $3.00 billion for the year. Analysts' estimates typically exclude special items.

In a separate press release, H&R Block reported that total U.S. tax returns prepared fiscal year-to-date through April 18 reached a record 22.2 million, up 4.5 percent from the same period last year.

Total digital tax returns prepared increased 12.3 percent fiscal-year-to-date through April 18, led by online unit growth of more than 20 percent. Total U.S. retail returns prepared grew 1 percent, while aggregate net U.S. retail tax preparation fees grew 1.1 percent for the comparable period.

HRB closed Wednesday's trading at $16.74, up $0.15 or 0.90 percent on 2.65 million shares. However, in after-hours, the stock declined $2.74 or 16.37 percent to $14.00.

by RTT Staff Writer

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