Introductory Note
On June 9, 2021, the Board of Directors approved a change of the Company's fiscal year end from April 30 to June 30. As a result, the Company's 2022 fiscal year began on July 1, 2021 and will end on June 30, 2022. The change to the fiscal year end had no impact on the Company’s historical consolidated financial position, results of operations, or cash flows. In order to aid in comparability to historical financial data, the Company has recast select unaudited historical financial information and metrics on the basis of a June 30 fiscal year end in the following table. Actual results for the comparable periods in the Company's 2022 fiscal year could differ materially from those experienced in the prior year periods reflected below.
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| SELECT RECAST FINANCIAL RESULTS | | | (Unaudited) (in 000's except per share amounts) |
| September 30, 2020 | | December 31, 2020 | | March 31, 2021 | | June 30, 2021 |
| Three Months Ended | | Three Months Ended | | Three Months Ended | | Three Months Ended | | Twelve Months Ended |
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| REVENUES: | | | | | | | | | | | |
| U.S. assisted tax preparation | $ | 207,167 | | | $ | 34,020 | | | | $ | 1,290,892 | | | | $ | 608,331 | | | $ | 2,140,410 | |
| U.S. royalties | 22,652 | | | 5,357 | | | | 150,117 | | | | 60,503 | | | 238,629 | |
| U.S. DIY tax preparation | 47,463 | | | 6,114 | | | | 181,294 | | | | 132,418 | | | 367,289 | |
| International | 58,776 | | | 26,637 | | | | 62,869 | | | | 81,125 | | | 229,407 | |
| Refund Transfers | 6,113 | | | 397 | | | | 134,799 | | | | 31,047 | | | 172,356 | |
| Emerald Card® | 12,436 | | | 9,962 | | | | 73,647 | | | | 48,050 | | | 144,095 | |
| Peace of Mind® Extended Service Plan | 27,192 | | | 18,570 | | | | 17,668 | | | | 34,421 | | | 97,851 | |
| Tax Identity Shield® | 8,994 | | | 4,809 | | | | 8,643 | | | | 18,553 | | | 40,999 | |
Interest and fee income on Emerald AdvanceSM | 526 | | | 14,039 | | | | 38,247 | | | | 429 | | | 53,241 | |
| Wave | 13,737 | | | 14,837 | | | | 16,082 | | | | 18,478 | | | 63,134 | |
| Other | 12,290 | | | 7,223 | | | | 9,306 | | | | 12,415 | | | 41,234 | |
| Total revenues | 417,346 | | | 141,965 | | | | 1,983,564 | | | | 1,045,770 | | | 3,588,645 | |
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| Compensation and benefits: | | | | | | | | | | | |
| Field wages | 92,545 | | | 66,307 | | | | 409,741 | | | | 243,530 | | | 812,123 | |
| Other wages | 63,068 | | | 63,568 | | | | 78,181 | | | | 75,487 | | | 280,304 | |
| Benefits and other compensation | 33,805 | | | 27,650 | | | | 92,825 | | | | 57,102 | | | 211,382 | |
| Total compensation and benefits | 189,418 | | | 157,525 | | | | 580,747 | | | | 376,119 | | | 1,303,809 | |
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| Occupancy | 96,850 | | | 99,029 | | | | 113,759 | | | | 103,862 | | | 413,500 | |
| Marketing and advertising | 15,492 | | | 15,490 | | | | 183,109 | | | | 50,654 | | | 264,745 | |
| Depreciation and amortization | 38,237 | | | 39,699 | | | | 39,100 | | | | 37,782 | | | 154,818 | |
| Bad debt | 520 | | | 16,570 | | | | 46,066 | | | | 19,197 | | | 82,353 | |
| Other | 77,582 | | | 93,200 | | | | 169,546 | | | | 137,457 | | | 477,785 | |
| Total operating expenses | 418,099 | | | 421,513 | | | | 1,132,327 | | | | 725,071 | | | 2,697,010 | |
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| Other income (expense), net | 2,504 | | | 538 | | | | 449 | | | | 1,498 | | | 4,989 | |
| Interest expense on borrowings | (34,697) | | | (21,489) | | | | (22,471) | | | | (20,834) | | | (99,491) | |
| Pretax income (loss) | (32,946) | | | (300,499) | | | | 829,215 | | | | 301,363 | | | 797,133 | |
| Income taxes (benefit) | 27,964 | | | (46,510) | | | | 69,543 | | | | 55,678 | | | 106,675 | |
| Net income (loss) from continuing operations | (60,910) | | | (253,989) | | | | 759,672 | | | | 245,685 | | | 690,458 | |
| Net loss from discontinued operations | (1,346) | | | (1,762) | | | | (1,425) | | | | (1,976) | | | (6,509) | |
| Net income (loss) | $ | (62,256) | | | $ | (255,751) | | | | $ | 758,247 | | | | $ | 243,709 | | | $ | 683,949 | |
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| DILUTED EARNINGS (LOSS) PER SHARE: | | | | | | | | | | | |
| Continuing operations | $ | (0.32) | | | $ | (1.38) | | | | $ | 4.09 | | | | $ | 1.32 | | | $ | 3.67 | |
| Discontinued operations | — | | | (0.01) | | | | (0.01) | | | | (0.01) | | | (0.03) | |
| Consolidated | $ | (0.32) | | | $ | (1.39) | | | | $ | 4.08 | | | | $ | 1.31 | | | $ | 3.64 | |
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| WEIGHTED AVERAGE DILUTED SHARES | 192,314 | | | 183,883 | | | | 184,905 | | | | 184,849 | | | 187,316 | |
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Adjusted Diluted EPS(1) | $ | (0.24) | | | $ | (1.28) | | | | $ | 4.11 | | | | $ | 1.39 | | | $ | 3.94 | |
EBITDA from continuing operations (1) | 39,988 | | | (239,311) | | | | 890,786 | | | | 359,979 | | | 1,051,442 | |
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(1) All non-GAAP measures are results from continuing operations. See "Non-GAAP Financial Measures" for a reconciliation of non-GAAP measures.
Select Recast Non-GAAP Financial Measures
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| | | | | | | | (Unaudited) (in 000's) |
| NON-GAAP FINANCIAL MEASURE - EBITDA |
| September 30, 2020 | | December 31, 2020 | | March 31, 2021 | | June 30, 2021 |
| Three Months Ended | | Three Months Ended | | Three Months Ended | | Three Months Ended | | Twelve Months Ended |
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| Net income (loss) - as reported | $ | (62,256) | | | $ | (255,751) | | | | $ | 758,247 | | | | $ | 243,709 | | | $ | 683,949 | |
| Discontinued operations, net | (1,346) | | | (1,762) | | | | (1,425) | | | | (1,976) | | | (6,509) | |
| Net income (loss) from continuing operations - as reported | (60,910) | | | (253,989) | | | | 759,672 | | | | 245,685 | | | 690,458 | |
| Add back: | | | | | | | | | | | |
| Income taxes (benefit) | 27,964 | | | (46,510) | | | | 69,543 | | | | 55,678 | | | 106,675 | |
| Interest expense | 34,697 | | | 21,489 | | | | 22,471 | | | | 20,834 | | | 99,491 | |
| Depreciation and amortization | 38,237 | | | 39,699 | | | | 39,100 | | | | 37,782 | | | 154,818 | |
| 100,898 | | | 14,678 | | | | 131,114 | | | | 114,294 | | | 360,984 | |
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| EBITDA from continuing operations | $ | 39,988 | | | $ | (239,311) | | | | $ | 890,786 | | | | $ | 359,979 | | | $ | 1,051,442 | |
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| | | (Unaudited) (in 000s, except per share amounts) |
| NON-GAAP FINANCIAL MEASURE - ADJUSTED EPS |
| September 30, 2020 | | December 31, 2020 | | March 31, 2021 | | June 30, 2021 |
| Three Months Ended | | Three Months Ended | | Three Months Ended | | Three Months Ended | | Twelve Months Ended |
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| Net income (loss) from continuing operations - as reported | $ | (60,910) | | | $ | (253,989) | | | | $ | 759,672 | | | | $ | 245,685 | | | $ | 690,458 | |
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| Adjustments: | | | | | | | | | | | |
| Amortization of intangibles related to acquisitions (pretax) | 17,638 | | | 16,531 | | | | 16,229 | | | | 15,848 | | | 66,246 | |
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Tax effect of adjustments(1) | (1,854) | | | 2,086 | | | | (11,699) | | | | (3,648) | | | (15,115) | |
| Adjusted net income (loss) from continuing operations | $ | (45,126) | | | $ | (235,372) | | | | $ | 764,202 | | | | $ | 257,885 | | | $ | 741,589 | |
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| Diluted earnings (loss) per share from continuing operations - as reported | $ | (0.32) | | | $ | (1.38) | | | | $ | 4.09 | | | | $ | 1.32 | | | $ | 3.67 | |
| Adjustments, net of tax | 0.08 | | | 0.10 | | | | 0.02 | | | | 0.07 | | | 0.27 | |
| Adjusted diluted earnings (loss) per share from continuing operations | $ | (0.24) | | | $ | (1.28) | | | | $ | 4.11 | | | | $ | 1.39 | | | $ | 3.94 | |
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(1) The tax effect of adjustments is the difference between the tax provision calculation on a GAAP basis and on an adjusted non-GAAP basis.
NON-GAAP FINANCIAL INFORMATION
Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Because these measures are not measures of financial performance under GAAP and are susceptible to varying calculations, they may not be comparable to similarly titled measures for other companies.
We consider our non-GAAP financial measures to be performance measures and a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business. We make adjustments for certain non-GAAP financial measures related to amortization of intangibles from acquisitions and goodwill impairments. We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.
We measure the performance of our business using a variety of metrics, including earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations, adjusted EBITDA from continuing operations, EBITDA margin from continuing operations, adjusted EBITDA margin from continuing operations, adjusted diluted earnings per share from continuing operations and free cash flow. We also use EBITDA from continuing operations and pretax income of continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.
