Tax preparation services provider Jackson Hewitt Tax Service Inc. (JTX) reported Thursday a decline in fourth-quarter profit, reflecting a 16.7% decrease in revenues. However, the adjusted per share earnings came in above Street view by a penny. The company also revealed that it intends to increase the number of directors on its board to seven from six members.
For the fourth quarter, net income dropped to $41.3 million or $1.45 per share from $57.5 million or $2.02 per share in the previous year.
The results of the latest quarter included lease termination and related expenses of $5.2 million, net employee terminations and related expenses of $1.7 million and provision for uncollectible franchisee receivables of $3.9 million among other one-time charges. Excluding items, earnings decreased to $48.2 million or $1.69 a share.
On average, six analysts polled by Thomson Reuters expected the company to report earnings of $1.68 per share in the fourth quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter decreased to $141.2 million from $169.4 million, chiefly due to a reduction in the number of tax returns prepared compared to the year-ago period, offset in part by increased revenues per tax return. Three analysts were expecting revenue of $144.51 million in the fourth quarter.
Revenue from Jackson Hewitt's franchise operations decreased year-over-year to $96.2 million from $114.4 million, with royalty income dipping to $41.7 million from $48.1 million, marketing and advertising revenues decreasing to $18.3 million from $21.3 million and financial product fees slipping to $33.6 million from $41.7 million.
Service revenues from company-owned office operations declined to $44.9 million from $54.99 million in the same period last year.
For the full year, net income slid to $19.5 million or $0.68 per share from $32.4 million or $1.09 per share in fiscal 2008. Adjusted earnings decreased to $29 million or $1.02 a share from $48.8 million or $1.37 a share in the past year. Total revenues for fiscal 2009 dropped 10.8% to $248.3 million from $278.5 million last year.
Analysts were expecting earnings of $1.01 per share on revenue of $251.31 million for fiscal 2009.
Jackson Hewitt also said that its board of directors intends to strengthen the number of directors to seven from six members.
JTX closed Wednesday's regular trading hours at $5.96 on the NYSE.
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