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H&R BLOCK EARNINGS INCREASE
28 PERCENT
FOR RELEASE WEDNESDAY, JUNE 19, 1996
KANSAS CITY, Mo. -- H&R
Block, Inc. (NYSE:HRB) today announced net earnings from continuing
operations for fiscal year 1996 of $125.1 million, or $1.18 per share.
This represents a 28 percent increase over the previous year's net earnings
of $98 million, or $.92 per share. Revenues for the year were $894.4 million,
a 13 percent increase over last year's $790 million.
The company completed an initial public offering of approximately
20 percent of CompuServe on April 18, 1996. In an earlier announcement,
H&R Block stated its intention to fully separate the two companies
by April, 1997. As a result of this decision, CompuServe is reported as
discontinued operations.
"We are delighted with these results. The 13 percent
increase in revenues clearly signals H&R Block is a growth company,"
said Richard H. Brown, president and chief executive officer. "To
achieve this level of growth while improving the pretax margin to more
than 22 percent indicates the accelerating momentum of this company."
Consolidated net earnings for fiscal year 1996, including
discontinued operations, were $177.2 million, or $1.67 per share, compared
to $107.3 million, or $1.01 per share, in fiscal year 1995. Last year's
earnings were negatively affected by an $83.5 million write-off of purchased
research and development associated with the acquisition of Spry, Inc.,
a subsidiary of CompuServe.
H&R Block Tax
Services rebounded from a disappointing prior fiscal year with a 31.7
percent increase in pretax earnings to $194.5 million. Tax Services prepared
16 million tax returns worldwide this year, a 3.5 percent increase over
the previous year. The number of U.S. tax returns prepared increased 3.4
percent to 13.4 million. The number of clients served worldwide with tax
preparation and electronic filing services rose to a record 17.4 million,
a 2.1 percent increase over fiscal year 1995.
"This was an excellent year for our tax business
by any standards," Brown said. "As H&R Block steps up its
expansion into higher-income and international markets next year, the company
will again aim for double-digit revenue and pretax earnings growth."
Block Financial
Corporation returned to profitability this fiscal year. Revenues rose to
$36.4 million, an increase of 15 percent over fiscal year 1995, and after
adjusting for businesses that were divested in 1995, Block Financial's
growth rate was 47 percent. Much of this success is due to growth in the
WebCardSM and CompuServe Visa® credit card business.
"Although it's still a small business, Block Financial
is increasingly evolving into a solid, financial services R&D arm of
our company and a strategic partner of our Tax Services business,"
Brown said.
The Board of Directors today declared a quarterly dividend
of $.32 per share payable on Oct. 1, 1996, to shareholders of record on
Sept. 1, 1996. As announced earlier, the Board intends to retain the current
dividend level until the complete separation of CompuServe. At that time,
the Board will review the dividend in light of current business and market
conditions.
CompuServe yesterday
separately reported revenues of $793.2 million, a 36.1 percent increase
over fiscal year 1995. Earnings were $49.1 million compared to 1995's $8.8
million, which was negatively affected by an $83.5 million write-off of
purchased research and development associated with the acquisition of Spry,
Inc.
Founded in 1955, H&R Block, Inc., is a diversified
company offering tax and financial services. H&R Block Tax Services
is the country's largest tax preparation firm handling approximately one
in every seven returns filed with the Internal Revenue Service in 1996.
The company served 17.4 million taxpayers in more than 9,600 offices in
the United States, Canada, Australia and 15 other countries and territories.
Block Financial Corporation, started in 1993, develops and provides technology-driven
financial services.
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