H&R Block Management Discusses Q1 2013 Results - Earnings Call Transcript

We also recently announced a significant milestone in the company's history. Our 200th consecutive quarterly dividend will be paid on October 1 to shareholders of record on September 14. Since Henry and Richard Bloch took the company public 50 years ago, the resiliency and consistency of our business has allowed us to generate substantial free cash flow, and that has enabled us to continue this dividend streak. Since 1962, H&R Block has paid a total of $3.5 billion in dividends. This is a strong testament to our business, and I am proud to be affiliated with a company that has a long tradition of returning capital to shareholders. We expect to deliver appropriate returns of capital to shareholders for many years to come.

Next, I'm pleased to announce today that we've entered into a new partnership with Sears, which we believe will be slightly accretive to fiscal 2013 earnings. Under the new agreement, we've elected to reduce the number of Sears locations in which we operate in to focus on 112 of our best performing Sears locations. The agreement also allows us to open seasonal offices in other Sears locations throughout the country during peak tax season.

In the Sears locations where we'll no longer operate, we believe we'll retain the vast majority of our clients based on our historical experience. In fact, since 2008, we've exited more than 200 Sears locations and we've retained nearly 75% of the clients served in these locations.

To put this in perspective, our retention of all Sears clients last year was 76%. So we do not expect this agreement will have a material impact on the number of returns we prepare going forward.

That said, we're very pleased to maintain our long-standing relationship with Sears, and we believe the new agreement benefits both parties and our clients.

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