JTH Holding Inc., the parent company of major tax prep chain Liberty Tax Service, reported its earnings for the year ended April 30, 2012, on Friday.
The company reported net income of $17.4 million, or $1.23 per diluted share. Because it had decided in the fourth quarter to postpone a planning initial public offering, it incurred an after-tax charge of approximately $800,000. Adjusting for that charge, the company said, its income had increased 16 percent compared to the prior year, on revenues that grew 14 percent, to $109.1 million.
During tax season, the company operated in 4,183 offices in the U.S. and Canada, up from 3,845 in the prior year. In both years, more than 98 percent of office locations were operated by franchisees. Total returns filed by the company increased to approximately 2.2 million from approximately 2 million in the prior fiscal year, an increase of 7 percent.
"Fiscal 2012 was another important year in Liberty's growth strategy to become the leader in the tax preparation industry," noted founder and CEO John Hewitt. "In a tough economic climate that has impacted small businesses around the country ... Liberty Tax Service continues to grow and expand. Issues at the IRS during the early portion of the season and the expiration of the Make Work Pay Tax Credit made customer service a challenge; however, our franchisees continue to provide the best service in the industry."
Although JTH Holdings decided to postpone its IPO, it also declared effective its SEC registration statement as of June 13, 2012, and its shares of Class A common stock became available for trading on the OTC Bulletin Board on June 14 under the symbol LTAXA. The company applied to list its Class A stock on NASDAQ.
The company also replaced an old credit facility with a new five-year credit facility through a syndicate of seven banks. The new facility totals $130 million and is comprised of a $25 million term loan and a $105 million revolving line of credit.
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