Tax preparer Jackson Hewitt Tax Service Inc. said Thursday that its fiscal 2009 first-quarter loss widened _ hurt by a severance-related charge and lease termination expense _ but matched Wall Street's estimates.
For the quarter ended July 31, the company reported a net loss of $20.5 million, or 72 cents per share, compared with a loss of $19.6 million, or 65 cents per share, in the year-ago period.
Results are based on 28.5 million shares outstanding in the fiscal 2009 period and 30.3 million shares outstanding in the fiscal 2008 period.
As part of a cost-cutting plan, Jackson Hewitt cut its work force by about 10 percent during the quarter, resulting in a pretax severance charge of $1.4 million. The company also closed 191 underperforming stores during the period, which led to a pretax charge of $1.6 million related to lease terminations and other expenses.
On an adjusted basis, excluding severance expense and other one-time items, the company's net loss was $19.7 million, or 69 cents per share, compared with $17.1 million, or 57 cents per share, in the prior-year quarter.
Analysts polled by Thomson Reuters, on average, had expected a loss of 69 cents per share. Analyst estimates typically exclude one-time, unusual items.
Total revenue dropped 28 percent to $4.3 million from $5.9 million in the period ended July 31, 2007. Expenses were essentially flat at $35.7 million. The decline was due primarily to lower territory sales, the company said.
Historically, Jackson Hewitt has generated about 2 percent of its total annual revenue in each of the first two fiscal quarters, due to the seasonal nature of the tax preparation business, and generally incurs a net loss during those periods. These losses have increased as the company expands.
The number of company-owned stores was higher at the outset of fiscal 2009 due to acquisitions in the prior fiscal year, the company said, which hurt the bottom-line. Additionally, Jackson Hewitt reported an increase in interest expense from previous share repurchases.
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