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Liberty Tax Service Reports Fiscal 2013 First Quarter Results

Stocks in this article: TAX

JTH Holding, Inc. (NASDAQ:TAX)( the “Company”), the parent company of Liberty Tax Service, today reported a net loss for the fiscal first quarter ended July 31, 2012, of $6.2 million, or $0.51 per share, compared to a loss of $5.0 million, or $0.44 per share, in the prior year period. Revenues grew 39% to $6.8 million for the fiscal first quarter ended July 31, 2012 compared to the prior year period. The Company’s operating expenses in the quarter included approximately $525,000 of costs associated with being a public company that were not incurred in the prior year quarter.

“We are pleased to announce first quarter financial performance, in-line with our expectations,” noted Mark Baumgartner, CFO. “Increased losses in our first and second quarter, when compared to prior periods, are expected as our company prepares for another high growth tax season,” explained Baumgartner.

Traditionally the Company spends a significant portion of the first quarter of its fiscal year planning for the upcoming tax season and kicking off the franchise sales season. During the first quarter the Company held a record number of meetings with franchisees planning for the 2013 tax season. “The involvement of our franchisees in our tax season planning is one of the key attributes that separates Liberty from the other national players,” noted John Hewitt, Chairman and CEO. “The marketplace insights provided by our franchisees allow us to continually enhance our system of doing business, which is a key to our success,” noted Hewitt. The Company plans to host an Investor Day in New York on December 12, 2012, at which time the Company anticipates sharing some of its 2013 plans.

The Company reported that its franchise sales season is off to a good start with leads, conference call attendance and seminar visits all up by more than 27% from fiscal 2012. During the previous two years, approximately 10% of the Company’s yearly territory sales and new franchisees closed during the first quarter. “Although the economic climate has reduced the amount of available investment capital for new and existing franchisees, I am very pleased with the interest levels shown during the first quarter by potential new franchisees and the eagerness of our existing franchisees to consider expanding,” said Mr. Hewitt. The Company plans to provide detailed sales activity in the second and third quarters, when historically, the cumulative closing activity becomes significant.

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