PARSIPPANY, N.J., May 28 /PRNewswire-FirstCall/ -- Jackson Hewitt Tax Service Inc. ("Jackson Hewitt") today reported preliminary tax filing results for the fiscal year ending April 30, 2009.
Jackson Hewitt's network of franchised and company-owned offices prepared 2.96 million tax returns in 2009, a decline of 12.9% compared to the prior fiscal year, excluding the impact of incremental Economic Stimulus Program tax returns from the 2008 fiscal year. This year-over-year decline in returns prepared is consistent with the previously communicated guidance of a decline in the range of 12% to 13%.
"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," said Michael C. Yerington, president and chief executive officer of Jackson Hewitt. "We provided full year guidance at that time on various metrics which indicated that we were headed toward declining profitability for the full year. At this time, based on our preliminary tax filing results, we expect our 2009 fiscal year results will be within the range of our previously provided operating profitability guidance."
"The 2009 tax season, our second consecutive tax season of declining return counts and reduced profitability, was acutely disappointing to us," continued Yerington. "We have already taken steps to reduce our cost structure coming out of the difficult 2009 tax season. As we look forward, we recognize we must alter the direction of Jackson Hewitt and are confident our people, brand, and distribution reach provide a sound foundation for us to meet this objective successfully. We are looking ahead with a sharp focus and the knowledge that several key initiatives must be successfully implemented in order to produce the improved results we seek in the 2010 tax season. In particular, we remain excited and optimistic about both the opportunity afforded us by our new, exclusive Walmart relationship, as well as the launch of our new online product in advance of next tax season. We will provide additional information regarding our various initiatives on our June 25 conference call."
Based on the preliminary tax filing results, Jackson Hewitt expects average revenues per tax return for the full year, versus the 2008 fiscal year, to increase 7.4%, consistent with the previously provided guidance range of 7% to 9%. This metric also excludes the lower priced Economic Stimulus Program tax returns in the prior fiscal year. Further, Jackson Hewitt expects total revenues for the 2009 fiscal year to be in the range of $247 million to $250 million, and adjusted diluted earnings per share to be at the low end of the previously communicated range of $1.00 to $1.10. The adjusted diluted earnings per share range excludes various restructuring, employee severance and other one-time, non-operational charges, which will be detailed in a schedule entitled Condensed Adjusted Results of Operations accompanying Jackson Hewitt's Earnings Release on June 25, 2009.
During the fourth quarter, operating cash flow was utilized to reduce Jackson Hewitt's outstanding debt from $356 million to $232 million at fiscal year-end.
Workforce Realignment
In connection with an initiative undertaken to achieve a lower cost structure in advance of the 2010 tax season, Jackson Hewitt's overall consolidated core workforce was reduced by approximately 13% late in the 2009 fourth quarter. In connection with this action, a pre-tax severance charge was recorded in the quarter and will be detailed in our June 25 Earnings Release.
Fiscal Year 2009 Reporting Date and Analyst Conference Call
Jackson Hewitt will report its fiscal 2009 results prior to the opening of trading on the New York Stock Exchange on Thursday, June 25, 2009. On the same morning at 8:30 a.m. (EDT), Michael Yerington, president and chief executive officer, and Dan O'Brien, chief financial officer, will host an analyst conference call to discuss the results from the current fiscal year 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, http://www.jacksonhewitt.com/. 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. , with approximately 6,600 franchised and company-owned offices throughout the United States during the 2009 tax season, is an industry leader providing full service individual federal and state income tax return preparation. Most offices are independently owned and operated. Jackson Hewitt is based in Parsippany, New Jersey. More information may be obtained at http://www.jacksonhewitt.com/. To locate the Jackson Hewitt Tax Service(R) office nearest to you, call 1-800-234-1040.
Forward-Looking Statements
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 diluted earnings per share, that 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 timely or effectively respond to customer trends and attract new customers, develop and make new products available through Jackson Hewitt's offices, improve Jackson Hewitt's distribution system or reduce Jackson Hewitt's 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 trend of tax payers filing their tax returns later in the tax season; 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 Jackson Hewitt's business; Jackson Hewitt's ability to protect Jackson Hewitt's 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 Jackson Hewitt's franchisees; changes in Jackson Hewitt's relationships with financial product providers that could reduce the revenues Jackson Hewitt derives from Jackson Hewitt's agreements with these financial institutions as well as affect Jackson Hewitt's customers' ability to obtain financial products through Jackson Hewitt's tax return preparation offices; changes in Jackson Hewitt's relationships with 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 Jackson Hewitt's business; Jackson Hewitt's ability to protect Jackson Hewitt's 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 Jackson Hewitt's performance as a result of tax season being relatively short and straddling two quarters; Jackson Hewitt's ability to pay dividends in the future; 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, 2008, 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.
Contacts: Investor Relations: Media Relations: David G. Weselcouch Sheila Cort Vice President, Vice President, Treasury and Investor Relations Corporate Communications 973-630-0821 973-630-0680
Jackson Hewitt Tax Service Inc.
CONTACT: Investor Relations, David G. Weselcouch, Vice President,
Treasury and Investor Relations, +1-973-630-0821; or Media Relations, Sheila
Cort, Vice President, Corporate Communications, +1-973-630-0680
Web Site: http://www.jacksonhewitt.com/
