Computerized tax returns provider Jackson Hewitt Tax Service Inc. (JTX) Thursday announced preliminary tax filing results for fiscal 2009, reporting a 12.9% year-over-year decline in total tax returns. The company also currently anticipates fiscal 2009 earnings at the low end of the prior guidance range and revenue is currently estimated below analysts' expectations.
In a statement, president and chief executive officer, Michael Yerington said, "On March 4, we reported that we had experienced a slow start to the tax season through February due to a number of factors, including a heightened awareness of price and value among first season customers, and a significantly higher level of encroachment from online filing, where we did not have a product."
Total tax returns prepared by franchised and company-owned offices declined 12.9% to 2.96 million from the previous year, excluding economic stimulus rebate tax returns. This is in line with the company's expectation of a decline in the range of 12% to 13%.
The company noted that while providing fiscal 2009 guidance it had indicated that the company is headed toward declining profitability for the full year. However, based on preliminary tax filing results, the company anticipates full-year results to be within the guidance range previously provided. For fiscal 2009, the Parsippany, New Jersey-based company expects adjusted earnings at the low end of the previously issued range of $1.00 to $1.10 per share.
On average, four analysts polled by Thomson Reuters expect the company to report earnings of $1.01 per share for fiscal 2009. Analysts' estimates typically exclude special items.
Total revenues for the year are currently estimated in the range of $247 million to $250 million. Four Wall Street analysts have a consensus revenue estimate of $253.49 million for the year.
Average revenues per tax return for the year are anticipated to increase 7.4%, in line with the guidance range of 7% to 9%, excluding the lower priced Economic Stimulus Program tax returns in fiscal 2008.
The company noted that 2009 tax season was its second consecutive tax season of declining return counts and reduced profitability. In order to overcome the decline, the company has initiated steps to reduce cost structure while coming out of the difficult 2009 tax season. The company is also optimistic on its 2010 tax season performance with the new exclusive Walmart relationship as well as the launch of its new online product in advance of next tax season.
The company added that it reduced its overall consolidated core workforce by about 13% late in the fourth quarter, under its initiative undertaken to achieve a lower cost structure. The company has recorded a pre-tax severance charge in this connection.
Jackson Hewitt said it would provide additional information regarding various initiatives and the charges recorded when it announces its financial results for the fourth quarter and full-year 2009 on Thursday, June 25, 2009. Analysts expect the company to report earnings of $1.69 per share on revenues of $147.03 million for the fourth quarter.
The company added outstanding debt in fourth quarter was reduced to $232 million from $356 million using operating cash flow.
JTX closed Thursday's regular trading session at $4.12, up $0.19 or 4.83% on a volume of 0.82 million shares, higher than the three-month average volume of 0.68 million shares.
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