Jackson Hewitt Shares Jump On CEO Appointment
The Associated Press
06/05/09 - 11:25 AM EDT
BOSTON (AP) Shares of Jackson Hewitt Tax Service Inc. surged on Friday after the company named a former chief executive of larger rival H&R Block Tax Services Inc. as its new chief executive, a move that led an Oppenheimer and Co. analyst to upgrade his rating of Jackson Hewitt's stock.
Parsippany, N.J.-based Jackson Hewitt saw its shares climb $1.78, or 41.6 percent, to $6.09 in morning trading.
After markets closed Thursday, Jackson Hewitt announced the immediate appointment of Harry W. Buckley, who was president and CEO of H&R Block from 1988 to 1995.
Buckley, 64, is a former member of the Jackson Hewitt board and a former chairman of a major franchisee. In the CEO post, Buckley succeeds Michael C. Yerington, who is leaving the company. Buckley will also join the Jackson Hewitt board as a director.
Oppenheimer and Co. analyst Scott Schneeberger upgraded his rating of Jackson Hewitt's stock to "Outperform" from "Perform." The stock has traded in a 52-week range of $2.80 to $17.83, and is off nearly 73 percent since the start of the year.
Jackson Hewitt said Buckley's appointment was the latest in a series of moves aimed at turning around the company. Others steps include contracting with a management consulting company, and working with financial adviser Goldman Sachs & Co., which Jackson Hewitt says is helping its board examine "a range of strategic and financial alternatives for the company."
In announcing Buckley's appointment, Jackson Hewitt's non-executive chairwoman, Margaret Richardson, said the company's board "has been working with a sense of great urgency to address the company's performance."
In March, Jackson Hewitt posted a slight rise in fiscal third-quarter profit, but nevertheless lowered its forecast for 2009 based on a decline in the number of tax returns prepared.
Richardson said work on a plan to turn around company performance "is well under way, which will help enable our new CEO to 'hit the ground running' in implementing performance-enhancing initiatives."
Buckley joined H&R Block in 1968 as a tax preparer and served in a variety of operational and marketing roles.
In January 1997, he joined the Jackson Hewitt board. In November 1998, he became chairman of a major Jackson Hewitt franchisee, Tax Services of America, and became a consultant to the company. He retired in 2002.
Jackson Hewitt had about 6,600 franchises and company-owned offices throughout the United States during the 2009 tax season.
