H&R Block announced that for its fiscal 2017 first quarter ended July 31, its total revenues fell $12.5 million, to $125.2 million.
The tax prep chain said in a statement that revenues and net loss were impacted by the divestiture of H&R Block Bank and changes to the company’s capital structure in fiscal 2016.
The fiscal first quarter typically represents less than 5 percent of annual revenues and less than 15 percent of annual expenses, and the recent figures were “not indicative of our full-year results,” Block added.
Total operating expenses declined 0.6 percent. Savings resulting from the company’s cost reduction efforts were partially offset by the impact of acquisitions of franchises in the prior year.
In addition to operating expenses, interest expense increased $12.9 million due to the issuance of $1 billion of long-term debt in September 2015, the company said.
The impact of the H&R Block Bank divestiture included payments to the company’s third-party bank partner, the reclassification of certain revenue as other income, and lower investment income due to the sale of securities previously held by the bank. Additionally, lower client volumes in the U.S. and foreign currency exchange rates contributed to the decline.
Block’s loss per share from continuing operations increased $0.20, to $0.55. Approximately half of the increase was due to the reduction in share count, the company said.
During the first quarter of fiscal 2017, the company repurchased and retired approximately 2 million shares at $23.84 per share. As of July 31, 219.1 million shares were outstanding.
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